Sometimes things do go wrong with a partnership arrangement and in the absence of a partnership agreement as to how the partnership is regulated, the provisions of an old piece of legislation will apply eg, the Partnership Act 1890.
Sometimes it is just not possible to continue working with other partners for all sorts of reasons including a conflict in personality. It may be possible to expel a partner by following contractual procedure, or to dissolve the partnership, or indeed it may be necessary to seek the assistance of the Court to dissolve and wind up.
Sometimes partners are found to be making secret profits from their business without the knowledge and consent of fellow partners. If this occurs, then it may be sufficient reason to justify expelling that partner from the partnership and then seeking an order from the Court directing that such profit be paid over to the partnership.
Following a dissolution issue, one partner may, without the consent of the others, continue with the business. This can often lead to problems and may involve the necessity to make an application to the Court to compel the winding up and sale of the partnership assets. Issues then arise as to the extent of the entitlement of the former partners to the proceeds of sale.
It is often common for partners to have injected different actual or working capital at the outset and, without an agreement, this can cause difficulties. The 1890 Act says that where there is no contrary agreement, all capital and working profits and losses are to be shared equally. To avoid this it is therefore important to get a partnership agreement drawn up an signed by all parties.
Leon Kaye Solicitors can offer commercial legal advice to both professional and other individuals with all kinds of partnership issues.
Please contact us at info@ leonkaye.co.uk for more information or call us on (Battersea office) 020 7 228 2020 or (Knightsbridge office) 020 7 095 0930.