Management and Decision Making
| Author | Elspeth Berry |
| Pages | 77-80 |
Chapter 6
Management and Decision Making
6.1 GENERAL PARTNERSHIPS
6.1.1 The right to manage
In default of contrary agreement, every partner has the right to take part in the management of the business (s 24(5) of the Partnership Act). As this is fundamental to partnership, and given the risk of personal liability, a partner, at least in a smaller firm, is unlikely to accept an agreement which excludes it.
6.1.2 The decision-making process
In default of contrary agreement, decisions as to ‘ordinary matters connected with the partnership business’ are to be taken by a majority of the partners, but unanimity is required to change the nature of the business (s 24(8) of the Partnership Act). Unanimity is also required to introduce a new partner (s 24(7)), to vary the mutual rights and obligations of the partners as laid down in the Partnership Act or the partnership agreement (s 19), or to confer a power of expulsion (s 25) (see further 9.1.6).
It may be advisable to alter these provisions to counter the possibility of an equality of votes, to provide for some degree of delegation and/or to make provision for extraordinary decisions other than those referred to in the Partnership Act. Provision for a casting vote, proxy voting and the exclusion from voting of a partner whose interests as an individual are affected by it (for example, expulsion; see further 9.1.6) should also be considered. If a majority is required for particular decisions...
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