The principal law governing partnerships is set out in the Partnership Act 1890 (the “Act”) which defines a partnership as “the relation which exists between persons carrying on a business in common with a view to profit” (section 1 of the Act).
The question of whether a partnership exists or not is therefore a matter of fact (not necessarily agreement). It is therefore not something which the parties can simply determine for themselves. While the relationship can be governed by a written partnership agreement, the essence of a partnership is the continuing relationship between two or more individuals, personal as well as commercial, with the contractual partnership agreement being only an indication of the relationship. [Read more…]