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Chapter PM132100

Document Cited authorities 1 Cited in Related
Vincent
Published date10 April 2016
Record NumberPM132100
CourtHM Revenue & Customs
IssuerHM Revenue & Customs

General partner

An ordinary member of a general partnership within the meaning of the Partnership Act 1890 or a limited partnership regulated by the Limited Partnership Act 1907, who bears joint liability without limit for debts of the partnership.

Limited partner

A limited member of a limited partnership whose rights and liabilities to creditors are restricted - see PM131310.

Salaried partner

Either

  • an employee, not a partner at all, who is given the title for prestige and who may be remunerated in part by reference to the firm’s profits. The employee’s name may even appear on the firm’s notepaper. But, if it does, the employee bears liability only to those who have advanced credit to the firm in the belief that they were a partner (S12 Partnership Act 1890), or
  • a partner who is entitled to a first share of profits, and who is in all other respects an ordinary partner

You should determine the true status of the person concerned by a detailed examination of the facts. In deciding which side of the line a person falls, it is important to consider whether or not they are entitled to participate as principal in the general management and conduct of the business. That is not to say that the day to day management of the business might not be delegated to others. This is often the case, particularly in relation to partnerships with large numbers of partners. But it is inherent in the contract of partnership that a true partner (as opposed to an employee) is permitted, indeed has the right, to participate in the general management and administration of the firm. If you...

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