PARTNERSHIP
Definition of Partnership
•	The relationship between two or more persons carrying on a business in common with a view to profit (s.1 Partnership Act)
•	Carrying on a business means an ongoing series of activities that are commercial in nature; not a hobby
•	In common means the partners act for and on behalf of all the other partners
•	With a view to profit means having an intention to generate profit, not operate a charity or sporting club:
•	An arrangement between two or more people is not automatically a partnership just because they:
o	Own property together
o	Share gross returns
o	Share profit:
(s.2 Partnership Act)
Fiduciary Duties
•	Trust is reliance on the integrity of another person
•	A person who holds a legal relationship of trust with another person is called a fiduciary
•	A fiduciary owes the other person fiduciary duties
•	Partners owe fiduciary duties to each other
•	Fiduciary duties require partners to:
o	Act in good faith
o	Make full disclosure
o	Account for benefits derived from dealing with the partnership
o	Account for the use of partnership assets
o	Not compete with the partnership
Partnership Contract
•	A partnership contract will govern the relationship between the partners (Bryant Bros v Thiele)
•	Where no partnership contract exists the Partnership Acts imposes a set of rules governing the relationship between the partners (s.24 Partnership Act)
Partnership Property
Partnership property includes items:
•	Brought into the partnership as partnership property
•	Acquired on behalf of the partnership
•	Acquired in the course of running the partnership business (Harvey v Harvey)
Third party liability
•	Partners are jointly liable for the debts and wrongful acts of the partnership (ss.9-10 Partnership Act)
•	A debt is a partnership debt when:
o	The transaction giving rise to the debt was conducted in the usual way the partnership is conducted
o	The partner acted within either actual or ostensible authority in entering the debt on behalf of the partnership
o	Unless the third party knew the partner had no authority or did not know the partner was a partner (s.5 Partnership Act)
•	A partnership be liable for a wrongful act when:
o	The wrongful act arose in the conduct of the ordinary business of the partnership: see s.10 Partnership Act
o	Even if the partner that committed the wrongful act was not authorised to act in that manner (Polkinghorne v Holland & Whittington)
Leaving the Partnership
•	Partners can continue to be liable for future debts and liabilities of a partnership even after they have left the partnership
•	A person dealing with a partnership can treat ex-partners as current partners until they are notified of the departure 
•	A person who has not had dealings with a partnership can treat ex-partners as current partners unless they have notice of the departure e.g. it is advertised in a local newspaper and the Government Gazette: 
•	s.36 Partnership Act
Expulsion of a Partner
•	No majority of the partners can expel any partner unless a power to do so has been conferred by express agreement between the partners (s.25 Partnership Act)
•	This means the partnership contract would have to include an expulsion provision
Termination of Partnership
Termination
•	A partnership can be terminated by:
o	Agreement
o	Operation of law (e.g. bankruptcy, death, incapacity)
o	Supervening illegality
o	Court order
•	The partners remain liable for partnership debts and wrongful acts committed or incurred prior to termination