LAWS2008A: WITS PLUS: BUSINESS ENTERPRISES LAW

JU KUEBLER
TOPIC 09 – PARTNERSHIPS

Note: Please take note that these are not complete class notes on each topic, but
merely supplementary notes, which follow the structure of the lectures.

1. The definition, features and legal nature of a partnership

2. The partnership agreement
2.1 General requirements for valid formation of contract
2.2 Essential requirements of partnership agreement and the parties’ intention.
2.3 Naturalia
4. Types of partnerships
4.1 Universal partnerships
4.2 Extraordinary partnerships
5. Consequences of a Partnership
5.1 Internal relations between the partners
5.1.1 Introduction
5.1.2 The Rights and Duties of the Partners
5.1.2.1 Good Faith
A partner must comply with his duties ito the partnership agreement
The partner must further the interests of the partnership unselfishly
Duty of full disclosure
5.1.2.2 Further duties not listed in the textbook
5.2 External relations between the partners and third parties
5.2.1 Introduction
5.2.2 Contractual Liability
5.2.3 General Principles
5.2.4 Representation
If the representative had the necessary authority
If a partner entered into the transaction on the strength of his mutual mandate
Through the operation of the doctrine of estoppel
Ratification
5.2.5 Delictual Liability
5.2.6 Criminal Liability
6. Dissolution of a partnership
6.1 Introduction
6.2 Grounds for Dissolution of the Partnership
6.3 Formalities for Dissolution
6.4 General Consequences of Dissolution

Prescribed Readings
Chapter 17
De Jager v Olifants Tin ‘B’ Syndicate 1912 AD 505
Pezzutto v Dreyer 1992 (3) SA 379 (A)
Learning Outcomes:

o Understand the definition of a partnership and its main characteristics.

o Understand the legal nature of a partnership.
o Explain the entity and the aggregate theory and what approach South African law
follows.
o Be aware of special types of partnerships, in particular the two types of extraordinary
partnerships (silent and commanditarian partnership) and be able to explain their
similarities and differences.
o Know what the difference is between essentialia and naturalia.
o Know and in detail understand the essentialia of a partnership agreement.
o Be able to explain the various naturalia of a partnership
o Know to whom partners owe duties.
o Fully understand and appreciate the extent of the duty of good faith and what this
means.
o Appreciate that the partnership is not a legal person, but an aggregate of all partners.
o Know the three elements which need to be considered when determining whether or
not an agreement between a partnership and a third party is binding.
o Understand the power of representation and authority and understand and be able to
explain in what instances the requirements can be satisfied, namely:
o Actual authority;
o Mutual mandate;
o Estoppel;
o Ratification.
o Know and be able to explain all grounds for the dissolution of a partnership.
o Understand the consequences of the dissolution of a partnership both between the
partners and between the partners and third parties.
1 THE DEFINITION, FEATURES & LEGAL NATURE OF A PARTNERSHIP

Definition

• One of the oldest organised business forms known to us in law.

• At C/L: Partnership = the legal relationship arising from an agreement between at
least two people in terms of which each contributes towards a business which is
carried on in common with the object of obtaining mutual material benefit.
• In the past: maximum 20 partners (1973 Companies Act).
• Overview of characteristics
o 2 ≤ Partners.
o Based on contract.
o Informal formation.
o Object is to make profits.
o Contribution is essential (ito money, goods, services or a combination).
o Business of the partnership MUST be carried on for the joint benefit of the
partners.
o linked closely to the partners - no legal personality.
* items in italic: essentialia to be covered below
• SA Law of partnership greatly based on Roman Law.

REMEMBER Sources of Law

Primary Sources of Law = binding (order of NB) Secondary Sources of Law

(persuasive)
1. Constitution 1. Customary Law / Indigenous Law
2. Legislation 2. Minority Judgements
3. Judicial Precedent 3. Court decisions of other countries
4. Common Law (R/D law) 4. Legal Textbooks
5. Customs & Trade Practices 5. Legal Journals

Re partnerships:

Common Law: Partnership law in South Africa is mainly governed by the common law.
Roman-Dutch jurists and case law
Legislation: No specific partnership legislation exists in SA dealing with partnerships.
Therefore, SA partnership law lacks clarity & accessibility. Some legislation has a
bearing on partnership law Business Names Act (certain documents must contain
all partner’s names, cannot use any name); Insolvency Act (treats partnership as a
separate entity for purposes on sequestration).
Legal Nature of a Partnership
• A partnership is based on a CONTRACT between the partners (written, oral or tacit).
• i.e. a partnership is a contractual association of specific persons (aggregate theory
[contractual association of specific persons] vs entity theory [an entity existing
separately from its members]). Consequences of aggregate theory:
o partnership dissolves when members change (death, retirement, new
partner):
▪ no legal personality: partnership does not own assets, does not have
rights and duties. So, in theory a creditor of the partnership can recover
debts from a partner in his personal capacity.
• However, s o m e exceptions to aggregate theory re Litigation: Whilst the
partnership exists, in principle all partners must be sued and Sequestration:

- For purposes of sequestration, the partnership is treated as a separate

entity.
- Partnership assets must first be exhausted, before the partners assets
can be touched.
- If a partnership is sequestrated, the partnership estate & the partner’s
estates are sequestrated, BUT separately.
- Idea is that partnership assets must pay for partnership debts &
individual assets for individual debts: Separate liquidation & distribution
accounts to be drawn up.

2. THE PARTNERSHIP AGREEMENT

2.1 General requirements for valid formation of contract

• Contract law - agreements b/w parties who have the intention to create legal
rights & duties b/w them
• Can be oral, tacit, written.
• A partnership is established by means of a valid agreement which embodies the
basic essentialia of a partnership and which is entered into with the true intention of
creating a partnership.
• Essentialia: Essential requirements for the contract to in order to be classified as a
partnership contract. Once a specific type of contract is established, the naturalia set
out the contractual consequences specific to the type of contract, where the parties
have not agreed otherwise.
• Being a contract, it has to comply to the following elements (commercial law I):
- Agreement (offer & acceptance)
- Contractual Capacity (companies, CCs can be partners)
- Certainty
- Possibility (mainly physical, but also legal)
- Formality – non prescribed for Partnerships, writing
- Legality / Lawfulness (both the contract as well as the partnership business)
2.2 Essential requirements of partnership agreement and the parties’ intention

Essentialia (Essential Elements) – cannot be altered by the partners: Pezzutto v Dreyer

1992 serves as illustration

• Certain specific types of contracts have certain essential elements. Often a court has
to look at those elements when people try to disguise one contract as another for
purposes of tax benefits.
• Eg. sale (undisturbed possession or ownership) v lease (use & enjoyment of the
property) example where a buyer / lessee can remove natural resources from the land.
• A contract is taken to be a partnership by the courts IF 1. Parties INTENDED to
create a partnership agreement & essentialia are present.

Essentialia #1. Contribution:

- Each partner must contribute - May be money, corporeal or incorporeal assets,
expertise or labour OR a combination. Note the contribution must be exposed to
the risk of the partnership.

Essentialia #2. Partnership’s objective must be to make a profit

- must be main object, not a possible result.
- patrimonial benefit is much wider than accounting definition, includes avoiding a
financial loss

Essentialia #3. The business of the partnership MUST be carried on for the joint benefit
of the partners
- business means anything occupying time, attention & labour of a person for the
purpose of making a profit.
- the nature & extent of the business can vary: a once of transaction to an ongoing
business.
- Joint benefit: every partner must have a right to profits (does not have to be
equal & can be applicable only where net profits exceed a certain amount).
This is a right to net profits (= gross income – expenses – losses) i.e. The sharing
of profits and losses therefore implies that a partner must in all events share in
the losses “so far, at least, as they constitute a charge upon, and diminution or
deduction from the profits”. An agreement by which gross returns are shared
without mutual responsibility in respect of expenses or advances is therefore not
a partnership.
(#4??) Contract must be a legitimate contract (not really an essential as it applies to all
contracts)
3 NATURALIA

Naturalia (natural consequences flowing from a partnership agreement) – can be

altered by agreement (not in textbook, but as per outline).

• The proportion in which profit is shared – shared in proportion to value of respective

contributions. If contributions cannot be ascertained partners share equally.

• Proportion in which losses are shared – shared in same proportion as the profits
would be shared; note also extraordinary partnerships.
• Partners’ power of representation – every partner can represent the partnership in
transactions which fall within the usual scope of the business of the partnership.
• Compensation for contribution – normally there is no compensation made for a
partner’s contribution.
• Co-Ownership – partners are joint owners of the partnership assets. Although it is
often possible to divide the property physically, this is often not done. Can be varied:
eg. I contribute a desk it will remain MY desk. BUT before realisation and distribution
of the partnership assets amongst the partners, a partner is not entitled to treat any
particular partnership asset as being his own, nor is any partner entitled to any specific
portion of the partnership assets as a whole. Regardless of the question who the
owner of the partnership assets is, every partner is contractually bound towards his
co-partners not to appropriate partnership assets for his own purposes or to regard
them as part of his private assets.
• The Partnership Fund
Co-ownership manifests itself in the partnership fund.
It is possible to remain owner of the asset, but make an asset’s use & enjoyment
that of the partnership.
• Restricted use of assets

4. TYPES OF PARTNERSHIP

• Apart from the ordinary type of partnership, there are also universal &
extraordinary partnerships.
• Main distinctions between:
o Universal vs particular partnership
o Ordinary vs extraordinary partnership
o
4.1 Universal Partnership vs Particular Partnership
• Universal partnership
o Two types taken over from Roman Law.
▪ Universorum bonorum: Partnership of all property (includes all the
partners property): usually used in family relationships.
Excursus: “Common Law Marriages” not recognised in South African
law, but possibility to argue a partnership existed between partners.
 ▪ Partnership of all profits (sharing of all profits); a general trading
partnership.
• Particular partnership
o More t e m p o r a r y and focus arrangement where the partners
contribute resources for a particular defined purpose only to share in the
profits from that
particular project.

4.2 Ordinary Partnership vs Extraordinary Partnership

• Ordinary partnership: No limitation of liability
• Extraordinary partnership
o Differ from other partnerships in that some partners are protected fromliability.
o Generally the extraordinary partners are only related to the other partners, not
to 3rd parties.
o Extraordinary partner MUST NOT act like an ordinary partner
o There must always be at least ONE ordinary partner
o Two types:
▪ Anonymous p a r t n e r s h i p O R a Silent partnership (the anonymous
partner is not known to the public & is liable to his partners only for his
pro-rata share of the debts or eventual shortfall), v joint & several liability.
▪ Commanditarian partnership (the commandiatarian partner is purely a
financial participant with restricted liability (similar to a SH). Is NOT
known to the public. He shares profits & losses, but his liability is
restricted to his/her specific contribution or an agreed amount.
Historic perspective: allowed for a similar involvement to a
shareholders in a company long before companies existed.

5. THE CONSEQUENCES OF A PARTNERSHIP

From a partnership agreement both internal relations and external relations arise

5.1 INTERNAL RELATIONSHIP BETWEEN THE PARTNERS

5.1.1 Introduction

• Partners have rights and duties between each other.

• Note: The duties are not owed to the partnership.
• They flow primarily from the partnership agreement itself.
• In the absence of contrary stipulations the partners’ rights & duties are also determined
by C/L principles.
• The rights and duties are simply rights which a partner can claim from his co-partners
and duties which he owed to them.
• Whilst the rights and duties are closely interwoven, they can be separated.
• The rights of the partners inter se can be summarised:
o Right to share in profit;
o Right to participate in management;
 o Right to compensation;
o Right to inspect partnership books and accounts (re management); and
o Right to distribution of assets on dissolution.
• The duties of the partners can be summarised:
o Duty to make a contribution towards the partnership;
o Duty to share in losses;
o Good Faith: Duty of care and skill; and
o Duty of full disclosure / duty to account (re management).

5.1.2 The rights and duties (briefly)

5.1.2.1 Good Faith (most important)

• There is a reciprocal fiduciary relationship between the partners.
• A fiduciary relationship may arise when the partners negotiate their partnership
agreement. The reciprocal fiduciary relationship continues after the dissolution of the
partnership. When the fiduciary relationship is destroyed, the court may dissolve the
partnership.
• One of utmost good faith and be compared as one between brothers (Purdon v Muller
1961)
• In general, four broad categories of duties arising from the fiduciary relationship can be
distinguished:

A. A partner must comply with his duties ito the partnership agreement / due acceptance
and fulfilment of partnership obligations

• A partner must comply with his duties ito the partnership agreement. Breach of
contract can constitute breach of his fiduciary duties as well.
• As part of the requirement of good faith, every partner must accept and fulfil all the
obligations imposed by the partnership agreement.
This connotes: a partner wishing to rely on a term in the partnership contract, must
equally be honouring the terms of the agreement AND a partner cannot complain if
his other partners fail to do their duty towards him, unless he is at all times ready to
do his duty towards them.

B. Duty to acquire benefits for the partnership / duty not to compete with the partnership

• The general principle underlying this fiduciary duty is that a partner may not acquire
and retain for himself any benefit or advantage which falls within the scope of the
partnership business.
• Thus, a partner may not compete with his firm by carrying on a business of the same
nature as and in rivalry with that of the partnership.
• All benefits obtained in conflict of this duty must be shared with and accounted for to
the partnership.
• It is essentially a question of fact whether a particular benefit or advantage which a
partner has obtained falls within the scope of the partnership’s business. The crucial
question is to determine the ambit of the partnership object, since a partner is not
obliged to account to the partnership for any gains which he obtains from a venture
 completely unconnected with the partnership’s business, even if the partnership was
the accidental cause of the obtainment of the benefit.
• De Jager v Olifants Tin ‘B’ Syndicate: serves as an illustration

C. Duty to guard against a conflict of interest

• A partner may not place himself in a position where his private interests may conflict
with his duty towards the partnership.
• Thus, where a 3rd party is a debtor of a partnership as well as a debtor of a partner
in his private capacity, the latter cannot obtain payment of his own debt in preference
to that of the partnership: should the third party pay his debt to the partner but fail to
do so to the partnership, the partner must appropriate what he receives to the credit
of the partnership and himself pro rata to the amount of the respective debts.
• It follows from a partner’s duty to avoid a conflict of interest with his partnership, that
a partner cannot acquire property intimately connected with the business of the
partnership, even if it may not fall directly within the scope of the firm’s business, if
the acquisition of such property would be detrimental to the interests of the
partnership.
• A partner may not use information which he has obtained as a partner for his own
benefit, if such action would conflict with the partnership’s interests.

D. Partner must disclose to his partners all info pertaining to the partnership / Duty of
full disclosure

• A partner is also obliged to disclose to his co-partners all information affecting the
partnership.
• Thus, if there is any prospect of profit to the partnership by the best exertions of a
partner in a particular venture, the prospects should be brought to the notice of the
other partners, and they should be put in a position to consider what attitude they will
take up with reference to such venture.
• Conversely, a partner may not conceal facts from his co-partners if knowledge of
those facts may have an influence on the other partners decision regarding their
partnership.

5.1.2.2 The following duties are bot dela with in the textbook, but are listed herein for
completeness
Contribution
Sharing of Profits and Losses
Compensation
Use and Distribution of Partnership Assets
Management of the Partnership
Reasonable Care
5.2. EXTERNAL RELATIONSHIP BETWEEN THE PARTNERS AND THIRD PARTIES

5.2.1 Introduction
• Relationships arise between 3rd parties with whom the partnership does business.
• Since a partnership does not constitute a body corporate (ultimately), the partners
themselves have to bear any liability it incurs vis-à-vis outsiders. The liability may be
contractual, delictual or criminal.

5.2.2 Contractual Liability

5.2.2.1 General Principles

• The partnership is bound by contract when a valid agreement is concluded by an

authorised representative of the partnership, therefore:
o The contract must be valid;
o The representative must be authorised to act; AND
o The contract must be concluded in the name / on behalf of the partnership.
▪ Whatever authority a contracting partner may have to bind the partnership,
it is sometimes stated as an additional requirement that, in order to render
the partnership liable, the obligation should have been contracted in the
name of the partnership.
▪ It has quite correctly been said that all that this amount to is the obvious
principle that the partnership incurs obligations only if it has been the
intention of the contracting partner and the third party that the obligations
will be incurred by the partnership and not by the contracting partner alone
in his personal capacity.
▪ Whether this has been the intention of the partner and third party is a
question of fact depending on the circumstances of each case.
▪ Once exception: doctrine of undisclosed principle (no need to look at
further).

5.2.2.2 Representation
• A partnership cannot itself enter into a contract (not a legal person);
• Its often not feasible for all partners to act together;
• therefore a partnership is always represented by a partner or a third party (eg. an
employee).
• Principal and agent
• The Agent here: the partner acting, the Principal here: all the other partners.
• A partnership will generally be bound by a contract which was concluded on behalf of it
in the following instances:

A. If the representative had the necessary authority

• Authority is essentially the power to perform binding legal acts on behalf of another.
• Authority can be given in writing, orally or tacitly.

B. If a partner entered into the transaction on the strength of his mutual mandate
= implied authority
• In term of the principle of mutual mandate, each partner has the power to bind the
partnership in transactions which fall within the partnership business.
• Partners can vary this power amongst themselves.
 • Whether a specific act or transaction falls within the scope of the partnership
business is question of fact. It depends on the nature and purpose of the partnership
concerned and the rules of general commercial usage.
• A 3rd party can assume that a partner has implied authority in respect of transactions
within the scope of the partnership business.
• A 3rd party must simply prove that a specific act fell within the partnership business
for the contract to be binding on the partnership. It is irrelevant whether the partner
IN FACT had the power to bind the partnership, provided the 3rd party was not acting
in bad faith.
[i.e. When a partner with power thus limited exceeds his express authority and
concludes a contract with a third person who is unaware of the limitation, but the
partner did act within his implied authority, the firm cannot shelter behind these secret
or private instructions, but is bound by the contract. This proposition was said to
commend itself as being a sound one in conformity with general principles and
common sense.]
• Note, however, a partner can also be expressly authorised to transact in certain
specified business on behalf of the partnership. Here the partnership will be bound
even if the transaction fell outside the scope of the usual or customary business of
the partnership.

C. Through the operation of the doctrine of estoppel (ostensible Authority)

• The doctrine of estoppels affords a remedy to a bona fide person who was injured
through deceit.
• By means of the defence, the deceived person can prevent the deceiver from relying
on the true state of affairs, to the prejudice of the deceived party.
• Requirements in summary: 1. If the partners falsely represented that a partner has
authority & 2. on the strength of this representation 3. the bona fide 3 rd party 4.
Entered into the contract.
• Further example: Where a non-partner, despite his not being authorised to act on
behalf of the partnership enters into a contract on behalf of the partnership. The
partnership may be liable, on the basis of estoppel, to a bona fide third party if the
partnership represented the non-partner as a partner or knowingly allowed the non-
partner to represent himself as a partner.

D. Ratification
• Ratification confers legal validity on contract with retrospective effect. (Actual
authority may also be conferred with retroactive effect. If a partner professing to act
on behalf of the partnership exceeds his authority, the other partners may adopt the
transaction by ratifying his act, in which case they will be bound by it.)

5.2.3 Delictual Liability (FYI ONLY)

• Vicarious liability is a form of liability which one person can incur for the acts of another
by virtue of the special relationship which exists between them (i.e. agent or employee).
• Partners can incur vicarious liability for delicts committed by a co-partner.
• It depends on the capacity a co-partner acted in.
• It appears that a partnership is liable for the delict of a partner committed while a) acting
in the ordinary course of partnership business, or b) when acting with the authority of
his partners.
5.2.4 Criminal Liability (FYI ONL)
• Since a partnership is not a legal persona, the partnership itself cannot commit an
offence, cannot be prosecuted and cannot be penalised.
• At Common Law a partner could be criminally liable for a crime committed by another
partner only on the ground of participation in the crime or vicarious responsibility.
• The Criminal Procedure Act extended liability by providing that when a partner has
committed an offence in carrying on the business or affairs of the partnership, any
person who was a member of the partnership at the time of the commission of the
offence is deemed to be guilty of that offence, unless it is proved that the latter did not
take part in the commission of that offence and could not have prevented it.
• If the business or affairs of the partnership are governed or controlled by “a committee
or similar governing body”, these provisions do not apply to any partner who was not a
member of that “committee or other body” at the time of the commission of the offence.
• The section will not stand Constitutional scrutiny though: a similar provision of the
Criminal Procedure Act relating to the personal criminal liability of a director was held to
be unconstitutional because it breaches the presumption of innocence in that it allows
the accused to be convicted despite the existence of a reasonable doubt as to his guilt.

6. DISSOLUTION OF A PARTNERSHIP

6.1 Introduction
• Legal Grounds which give rise to dissolution of the partnership.
• On a partnership dissolving the following happens:
o The legal relationship crated in the partnership contract changes;
o Partnership assets are liquidated;
o Partnership creditors are paid; and
o Surplus divided amongst partners.

6.2 Grounds for Dissolution of the Partnership

6.2.1 Mutual Agreement of Dissolution

• It is clear that a partnership, like any other agreement, can be dissolved by a subsequent
agreement, express or implied, between all the partners to that effect.
• Sometimes the partnership contract itself sets out a certain procedure for dissolution,
then obviously that procedure has to be followed.
6.2.2 Effluxion of term / time
• A partnership can be created for a fixed term.
• At the end of the term, it will ordinarily be dissolved, unless one of the partners has a
just or lawful cause for its earlier dissolution, or the partners expressly or impliedly agree
to continue the partnership.
6.2.3 Completion of partnership business
• Where the partnership has been formed with the object of carrying out a certain business
or specific undertaking, for instance to erect a building, the partnership is dissolved by
the completion of the business or undertaking.
6.2.4 Change in Membership: Death of partner, Retirement of a partner, Admittance of a
new partner
• The partners stand in a contractual relationship to one another.
• Therefore, any change in membership destroys the identity of the firm.
• On the death of a partner, the partnership dissolves immediately. Partners can, however,
carry on partnership business for a while for the benefit of the partner’s estate.

• The partnership is dissolved by the retirement of an existing partner. If the remaining

partners agree to continue the business of the partnership, a new partnership is created.
• Any one of the partners can dissolve the partnership at his own discretion, even against
the wishes of all the other partners, by giving notice to them that he no longer intends to
continue the partnership. This notice of dissolution must be given in good faith and not
at an unreasonable or inconvenient time.

• Since a new partner can be admitted only by agreement between him and all the existing
partners, the existing partnership is dissolved, and a new partnership created by the
admission of a new partner.

• Note: A business may be transferred from the old partnership to the new partnership,
contracts with third partis must generally be concluded afresh.

6.2.5 Order of Court

• A partner may apply to court for an order which dissolves the partnership. A court will
grant such order if there are sufficient grounds to make dissolution just and equitable.
The court will exercise its discretion in the light of the interests of all partners.
• Some examples where a court will grant dissolution:
o Partner declared mentally ill - When any member of a partnership is declared
mentally ill by the court, the court may, by the same or by any subsequent order,
dissolve the partnership or make such order as in the circumstances may seem
just.
o Breach of fiduciary relationship – also see above duty of good faith.

6.2.6 War/ Partner becoming alien enemy

When one of the partners becomes an alien domiciled or resident in enemy territory.

6.2.7 Sequestration
A partnership is dissolved by the sequestration of the estate of the partnership, and by the
sequestration of the private estate of a partner or if a partner is a CC / Company, by the
liquidation of such.

6.3 Formalities for Dissolution

• No statutory formalities are necessary;
• Wide publicity is, however, advisable to notify 3rd persons which will also minimise the
risk of a contract being binding based on Estoppel after termination.
• If a new partnership is formed taking over the business of the old one, s34 of the
Insolvency Act needs to be complied with: publication in 4 local news papers (two
English & two Afrikaans) and Government Gazette and mailing notices to clients and
creditors of the partnership.
6.4 General Consequences of Dissolution
• The dissolution of the partnership affects the relationship b/w the partners as well as the
relationship b/w partners and 3rd persons.

6.4.1 Relationship b/w partners

• Does not terminate the relationship, but alters it drastically.
• The relationship ends when the liquidation of the partnership estate and final settlement
has taken place b/w the partners; eg. fiduciary duties remain during sequestration.
• Termination of the partnership agreement – generally all the terms lapse.
• Termination of the mutual mandate in respect of all transactions not aimed at the
completion of uncompleted partnership business or at the liquidation of the partnership
estate.

6.4.2 Relationship b/w partners & third parties

• General Liability of Partners
• Partners are co-creditors and co-debtors during the subsistence of the
partnership. i.e. they must sue / be sued together
• When the partnership ends, the position changes. The partners then become joint
& several co-debtors in respect of any unpaid partnership debts.
• When the partnership dissolves, the rights and obligations of the partnership remain
valid and binding.
• Debtors of the partnership remain liable.
• The partnership still remains liable to perform ito its obligations to the creditors.
• There is, however, a change: partners now become jointly & severally liable.