Case Study: Partnership with Foreign Company and Disputes

This case study examines a partnership between a company and a foreign entity, focusing on the legal and practical aspects of conducting business in the United Kingdom. It delves into the formation of partnerships, referencing the Partnership Act 1890, the Limited Partnership Act 1907, and the Limited Liability Partnerships Act 2000. The case study highlights potential legal risks associated with international partnerships, including compliance with taxation and regulations, governance issues, and market-related challenges. Furthermore, it addresses the potential for contractual disputes, such as infringements of duties and rights, profit-sharing disagreements, liability issues, and fiduciary concerns, emphasizing the role of courts and alternative dispute resolution methods. The case study underscores the importance of understanding UK partnership law and the potential challenges and solutions involved in international business collaborations, providing valuable insights for business development and management.

Partnership
March 12
2020
Partnership with foreign company and the contractual obligations
related to same as well as issues or disputes that might arise. Case Study

Management 1
Partnership
Partnership is a method by which people can conduct business depending upon their
own convenience. Partnership refers to a business being conducted by parties involved where
the profits as well as loss sharing ratios are decided amongst the parties (Sutherland &
Williams, 2020). It is a way to conduct business in order to gain a certain profit (PK, 2020).
While in some countries, it is not necessary to register their partnership, some countries have
made it a mandatory thing to get partnership firms to be registered with the authorities. In the
given scenario, the partnership is going to take place overseas; hence, the laws of the country
in which partnership is going to take place will be applicable to the firm. In this case study, it
is assumed that the partnership business is to be conducted in the United Kingdom. Therefore
the laws related to partnership of business in the UK shall be discussed further. Apart from
this another aspect that shall be discussed below is the legal risks involved with the same.
Aspects related to the potential contractual disputes shall also be debated upon further.
Partnership in UK
In UK, partnership being conducted is quite common practice. In a partnership
partners tend to share the responsibility amongst them based upon their own understanding
with each other as well as the clauses of their agreement. These responsibilities include all the
profits or losses that are incurred during the time of their partnership as well as taking care of
the bills or expenses then that have incurred regarding the day to day activities of the
business, this might include the equipment or stock or any such expenses. Now the
partnership business in UK has to be constructed under the Partnership Act 1890, while, if
the partnership amongst the partners is a Limited partnership then it needs to be formed under
the Act of Limited Partnership Act 1907 that was formed for the sole purpose of referring to
the limited partnerships, while, the Limited Liability Partnerships Act 2000 was formed to

Management 2
deal with the partnerships that had a limited liability amongst them (Gov.UK, 2020). FCA is
the authority that takes care of the partnerships or Joint Ventures being regulated in the
country (FCA, 2020).
Legal Risks involved in foreign partnerships
The issues that might arise between the partners while conducting business overseas
will include issues with compliance of laws related to taxation or even regulation as the
company in Australia would know less about the laws that a firm has to comply with in the
United Kingdom. Also another issue that the Company or firm might have to face is
governance or the market related issues as the need of the market and other management
issues might become the one that might cause certain legal issues in a partnership firm.
Contractual Disputes
Another issue of concern here is the disputes that might arise due to contract between
the parties as in the duties and rights being infringed or even issues related to the profit
sharing can be questioned upon. Also other regular contractual issues like the one where
liability is involved or fiduciary issues, all of these can be regarded as the contractual
disputes. Now all of these can be resolved with the involvement of the courts as well as other
alternated dispute resolution methods as well if the parties decide to do so as it will save a lot
of time as well as cost and legalities and issues involved (Saunders Law, 2018).

Management 3
Bibliography
FCA. (2020). The On-Line Partnership Limited. Retrieved March 12, 2020, from FCA:
https://register.fca.org.uk/ShPo_FirmDetailsPage?id=001b000000MfIu0AAF
Gov.UK. (2020). Set up a business partnership. Retrieved March 12, 2020, from Gov.UK:
https://www.gov.uk/set-up-business-partnership
PK. (2020). UK Partnership Law. Retrieved March 12, 2020, from PK:
https://pakaccountants.com/courses/partnership-act/
Saunders Law. (2018). How to avoid partnership disputes. Retrieved March 12, 2020, from
Saunders Law: https://www.saunders.co.uk/news/how-to-avoid-partnership-
disputes.html
Sutherland, D., & Williams, T. (2020). Formation of partnerships in United Kingdom.
Retrieved March 12, 2020, from Lexology:
https://www.lexology.com/library/detail.aspx?g=1325a2fd-22f4-4744-a99b-
d20f1a2847a7