University Report: Partnership Law and Business Structure, LAWS20059

This report provides a comprehensive overview of partnership law and business structures. It begins by outlining the key steps involved in establishing a partnership, including the number of partners, agreeing on key issues such as remuneration and profit sharing, deciding on a business name, and registering the business. The report emphasizes the importance of written partnership agreements as per section 74 of the Partnership Act 1891, highlighting their role in defining duties, protecting rights, and providing control over the business. The report also covers the distribution of profits and losses, referencing the general rule outlined in section 27 of the Partnership Act. Finally, the report addresses the dissolution of partnerships, including provisions contained in Part 4 of the Partnership Act, 1891, and the sequence of asset distribution during the dissolution process. This report is designed to provide a clear understanding of the legal and practical aspects of partnerships, including the rights, responsibilities, and procedures for both formation and dissolution within the Australian legal framework.

Corporation Law and Business
Structure

Key Points
 Procedure to set up a partnership
 Written partnership agreements
 Partner’s share in the partnership
 Dissolution of partnership

Procedure to set up a
partnership
 Assess the number of partners.
 Agree on key issues:
Remuneration, Profit sharing ratio,
capital contribution, assets
contribution, and others.
 Decide a business name.
 Register the business name.
 Apply for relevant licences.

Written partnership agreements
 A partnership agreement can must be written as
per section 74 of the Partnership Act 1891.
 Imperative to have a written partnership
agreement because:
1. To reach an agreement on key issues in
Advance
2. To have control over the business.
3. For the protection of the rights.
4. Clear definition of the duties.

Share in the partnership
agreements
 Equal share of the profits as
per the General rule
mentioned in section 27.
 Can reach an agreement for
share of profits for other than
the equal ratio.
 The losses would also be
shared as per the agreed
share.

Dissolution of Partnerships
 Provisions contained in Part 4 of the Partnership
Act, 1891.
 Dissolution can take place by four means:
Dissolution by expiration or notice
Dissolution by insolvency, death, or charge
Dissolution by illegality of partnership
Dissolution by the court
 The provisions for the settlement of the accounts
between the partners are mentioned in the
section 47.

Dissolution of Partnerships
 Losses and deficiencies must be paid out of
First: Profits
Second: Out of capital
Third: Individual contribution in share of profits.
 Assets application sequence:
First towards the payment of dues of the outsiders.
Payment that firm owes to each partner for advances.
Payment to partners for capital.
Distribution of the residue.