ARRANGEMENT OF SECTIONS
1. Short title
NATURE OF PARTNERSHIP
3. Definition of a partnership
4. Rules for determining existence of partnership
5. Postponement of rights of person lending or selling in consideration of share of profits in case of insolvency
6. Meaning of firm
RELATIONS OF PARTNERS TO PERSONS DEALING WITH THEM
7. Power of partner to bind the firm
8. Partners bound by acts on behalf of firm
9. Partner using credit of firm for private purposes
10. Effect of notice that firm will not be bound by acts of partner
11. Liability of partners
12. Liability of the firm for wrongs
13. Misapplication of money or property received for or in custody of the firm
14. Liability for wrongs joint and several
15. Improper employment of trust property for partnership purposes
16. Persons liable by “holding out"
17. Admissions and representations of partners
18. Notice to acting partner to be notice to the firm
19. Liabilities of incoming and outgoing partners
20. Revocation of continuing guarantee by change of firm
RELATIONS OF PARTNERS TO ONE ANOTHER
21. Variation by consent of terms of partnership
22. Partnership property
23. Property bought with partnership money
24. Conversion into personal estate of land held as partnership property
25. Procedure against partnership property for a partner’s separate judgment debt
26. Rules as to interests and duties of partners subject to special agreement
27. Expulsion of partner
28. Retirement from partnership at will
29. Where partnership for term is continued over, continuance on old terms presumed
30. Duty of partners to render accounts, etc.
31. Accountability of partners for private profits
32. Duty of partner not to compete with firm
33. Rights of assignee of share in partnership
DISSOLUTION OF PARTNERSHIP AND ITS CONSEQUENCIES
34. Dissolution by expiration or notice
35. Dissolution by bankruptcy, death, charge or subjection to forfeiture
36. Dissolution by illegality of partnership
37. Dissolution by the Court
38. Rights of person dealing with firm against apparent members of firm
39. Right of partners to notify dissolution
40. Continuing authority of partners for purposes of winding up
41. Rights of partners as to application of partnership property
42. Apportionment of premium where partnership prematurely dissolved
43. Rights where partnership dissolved for fraud or misrepresentation
44. Right of outgoing partner in certain cases to share profits made after dissolution
45. Retiring or deceased partner’s share to be a debt
46. Rule for distribution of assets on final settlement of accounts
47. Saving for rules of equity and common law
4 of 1969
An Act relating to partnerships and matters incidental thereto and connected therewith
This Act may be cited as the Partnership Act.
In this Act, unless the context otherwise requires—
“business” includes every trade, occupation or profession;
“Court” means the High Court.
NATURE OF PARTNERSHIP
(1) Partnership is the relation which subsists between persons carrying on business in common with a view to profit.
(2) The relation between members of any company or association which is—
(a) registered as a company under any written law for the time being in force in Malawi rating to the registration of joint stock companies; or
(b) formed or incorporated by or in pursuance of any other written law, letters patent or Royal Charter;
is not a partnership within the meaning of this Act.
In determining whether a partnership does or does not exist,regard shall be had to the following rules—
(a) joint tenancy, tenancy in common, joint property, common property, or part ownership does not of itself create a partnership as to anything so held or owned, whether the tenants or owners do or do not share any profits made by the use thereof;
(b) the sharing of gross returns does not of itself create a partnership, whether the persons sharing such returns have or have not a joint or common right or interest in any property from which or from the use of which the returns are derived;
(c) the receipt by a person of a share of the profits of a business is prima facie evidence that he is a partner in the business, but receipt of such a share, or of a payment contingent on or varying with the profits of a business, does not of itself make him a partner in the business; and in particular—
(i) the receipt by a person of a debt or other liquidated amount by instalments or otherwise out of the accruing profits of a business does not of itself make him a partner in the business or liable as such;
(ii) a contract for the remuneration of a servant or agent of a person engaged in a business by a share of the profits of the business does not of itself make the servant or agent a partner in the business or liable as such;
(iii) a person being the widow or child of a deceased partner, and receiving by way of annuity a portion of the profits made in the business in which the deceased person was a partner, is not by reason only of such receipt a partner in the business or liable as such;
(iv) the advance of money by way of loan to a person engaged or about to engage in any business on a contract with that person that the lender shall receive a rate of interest varying with the profits, or shall receive a share of the profits arising from carrying on the business, does not of itself make the lender a partner with the person or persons carrying on the business or liable as such:Provided that the contract is in writing, and signed by or on behalf of all the parties thereto;
(v) a person receiving by way of annuity or otherwise a portion of the profits of a business in consideration of the sale by him of the goodwill of the business is not by reason only of such receipt a partner in the business or liable as such.
In the event of any person to whom money has been advanced by way of loan upon such a contract as is mentioned in section 4, or of any buyer of a goodwill in consideration of a share of the profits of the business, being adjudged a bankrupt, entering into an arrangement to pay his creditors less than twenty shillings in the pound, or dying in insolvent circumstances, the lender of the loan shall not be entitled to recover anything in respect of his loan, and the seller of the goodwill shall not be entitled to recover anything in respect of the share of profits contracted for, until the claims of the other creditors of the borrower or buyer for valuable consideration in money or money’s worth have been satisfied.
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