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Key points

Part one:

Partnership: A partnership is a strategic alliance or relationship between


two or more people.

Purpose : Partnership is the relation which subsists between persons


carrying on a business in common with a view of profit.

Part Two:

 Partnership is the relation which subsists between persons carrying on


a business in common with a view of profit.

 But the relation between members of any company or association which


is--

 (a) registered as a company under the Companies Act 1862, or any


other Act of Parliament for the time being in force and relating to the
registration of joint stock companies; or

 (b) Formed or incorporated by or in pursuance of any other Act of


Parliament or letters patent, or Royal Charter; or

 (c) A company engaged in working mines within and subject to the


jurisdiction of the Stannaries;

 is not a partnership within the meaning of this Act.

Law sourounding Partnership

 Partnerships are the most common form of business arrangement in


Ireland, apart from companies. Yet the law applicable to partnerships
remains firmly in the last century. A reform of the law is now required
in view of the explosion in the number of partnerships and their
important role in Irish business life.

Examples of Partnership

 The most common category of partnership is the professional


partnership. Accountants, solicitors, doctors, vets, dentists and other
professionals are not allowed to form companies, as they must be
personally liable to their clients or patients. These types of
partnerships form a large part of the multi-billion pound professional
services industry in Ireland.
 The third category of partnership is the investment partnership and the
number of these has exploded in recent years. In film finance schemes,
carpark investments and holiday home schemes, partnerships are
often formed because of their tax advantages over companies.

 Another reason partnerships are chosen for such investments is


because, unlike most companies, they do not have to file accounts.
Partnerships are also popular in venture capital investments, since
capital can be invested in, and withdrawn from, a special type of
partnership (known as a limited partnership) without formality, unlike
the situation in a limited liability company.

Advantageous

 These limited partnerships have the added advantage of offering


limited liability to some of the partners in the much the same way as
shareholders in a company have limited liability.

 For all of these reasons, partnerships have begun to attract more


attention in recent years, yet the law relating to partnerships
remains very much rooted in the last century.

Disadvantageous

 Another problem with these implied terms is that they do not entitle
the partners to expel their co-partner, no matter how negligent or
fraudulent he might have been.

 Their only option in such a situation is to apply to court for the firm
to be wound up. Instead, the courts should be given the power to
order the buy-out of a partner's share, as happens in company law.

 Michael Twomey is a solicitor specialising in partnership law. He is


the author of Partnership Law (Butterworths), a guide to the law of
partnership for accountants, tax consultants and lawyers