Partnership in UK Law

Leading Cases
  • Ebrahimi v Westbourne Galleries Ltd; Re Westbourne Galleries Ltd
    • House of Lords
    • 03 Mayo 1972

    I could, in any case, not be persuaded that the words "just and equitable" need or can be confined to such situations. Whether there is deadlock or not, he says, the circumstances "are such that we ought to apply, if necessary, the analogy of the partnership law and to say that this company is now in a state which could not have been contemplated by the parties when the company was formed."

    The superimposition of equitable considerations requires something more, which typically may include one, or probably more, of the following elements—(i) an association formed or continued on the basis of a personal relationship, involving mutual confidence—this element will often be found where a pre-existing partnership has been converted into a limited company; (ii) an agreement, or understanding, that all, or some (for there may be "sleeping" members), of the shareholders shall participate in the conduct of the business; (iii) restriction upon the transfer of the members' interest in the company—so that if confidence is lost, or one member is removed from management, he cannot take out his stake and go elsewhere.

    But the expressions may be confusing if they obscure, or deny, the fact that the parties (possibly former partners) are now co-members in a company, who have accepted, in law, new obligations. A company, however small, however domestic, is a company not a partnership or even a quasi-partnership and it is through the just and equitable clause that obligations, common to partnership relations, may come in.

    People do not become partners unless they have confidence in one another and it is of the essence of the relationship that mutual confidence is maintained. If neither has any longer confidence in the other so that they cannot work together in the way originally contemplated then the relationship should be ended—unless, indeed, the party who wishes to end it has been solely responsible for the situation which has arisen.

  • Ebrahimi v Westbourne Galleries Ltd; Re Westbourne Galleries Ltd
    • House of Lords
    • 03 Mayo 1972

    The words are a recognition of the fact that a limited company is more than a mere judicial entity, with a personality in law of its own: that there is room in company law for recognition of the fact that behind it, or amongst it, there are individuals, with rights, expectations and obligations inter se which are not necessarily submerged in the company structure.

  • MacKinlay v Arthur Young McClelland Moores & Company
    • House of Lords
    • 23 Noviembre 1989

    What he receives out of the partnership funds falls to be brought into account in ascertaining his share of the profits of the firm except in so far he can demonstrate that it represents a payment to him in reimbursement of sums expended by him on partnership purposes in the carrying on of the partnership business or practice — the example was given in the course of argument of the partner travelling to and staying in Edinburgh on the business of the firm — or a payment entirely collateral made to him otherwise than in his capacity as a partner (as in Heastie v. Veitch & Co.

  • Ensign Tankers (Leasing) Ltd v Stokes
    • House of Lords
    • 12 Marzo 1992

    The production and exploitation of a film is a trading activity. The expenditure of capital for the purpose of producing and exploiting a commercial film is a trading purpose. The section is not concerned with the purpose of the transaction but with the purpose of the expenditure. It is true that Victory Partnership only engaged in the film trade for the fiscal purpose of obtaining a first year allowance but that does not alter the purpose of the expenditure.

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Legislation
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Law Firm Commentaries
  • US/UK Partnership Announced
    • LexBlog United Kingdom
    In recent days, the US EPA’s National Center for Environmental Research and the United Kingdom’s Natural Environment Research Council, Physical Sciences Research Council, Department for Environment...
  • U.K. Partnership Tax Changes
    • JD Supra United Kingdom
    Slightly later than first advertised, Her Majesty’s Revenue & Customs (HMRC) has now issued further guidance regarding the employment status of members of U.K. limited liability partnerships (LLPs).
  • UK Government Launches Cybersecurity Partnership
    • LexBlog United Kingdom
    On March 27, 2013, the UK Government announced the Cyber Security Information Sharing Partnership (“CISP”), a partnership between government and industry to share intelligence on cybersecurity thre...
  • Limited liability partnership and partnership accounts: amending regulations
    • JD Supra United Kingdom
    New regulations make changes to the accounting regulatory framework for LLPs to bring it into line with changes made in 2015 to the accounting regulatory framework for companies.
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