the absence of such a provision, the Court will decree a dissolution if the misconduct of a partner is such as to destroy altogether the mutual confidence without which his business cannot be carried on (d). sions necessary of a partner. taining value share, by last yearly Where a partnership is determined by the death or Special proviretirement of a partner, it is generally wished that the to prevent business shall continue to be carried on by the others. compulsory winding-up, In order, therefore, to prevent the compulsory wind- on death, &c., ing up of the concern, it is usual to provide some other mode of ascertaining the share of the deceased or outgoing partner. One plan is to provide that the share Plan for ascerof capital shall be taken at its value as ascertained by of deceased the last yearly balance sheet, and that some fixed sum partner's by way of interest from that time up to the death or reference to retirement shall be allowed in lieu of profits. This account, plan obviates the necessity for any new balancing of accounts; but it is open to this objection, that if there should have been any serious loss since the last stocktaking, the loss will fall on the continuing partners alone. Another plan is to give to the continuing or by valuapartners the option of purchasing the share at a valuation, to be made on the day of the death or retirement. It has been decided that a clause of this kind will be enforced, and that if the valuation cannot be made by the person and in the manner directed, the Court will ascertain the value (e). tion. In framing any provision for determining the share Goodwill. of a deceased or outgoing partner, it should be stated whether anything is to be allowed for the goodwill. BETWEEN TWO PERSONS. Parties. Witnessing part. Mutual covenant to become partners. Duration of partnership. Title of firm. Place of business. Bankers. Capital. Advances by partners to bear interest. No. I. DEED of COPARTNERSHIP between Two PERSONS. THIS INDENTURE, made the day of, BETWEEN A. B., of, &c. (one partner), of the one part, and C. D., of, &c. (other partner), of the other part: WITNESSETH, that the said A. B. and C. D., hereby mutually covenant and agree to become and be partners in the trade or business of, upon and subject to the terms, conditions, and stipulations expressed in the following articles (that is to say) : 1. THE partnership shall continue for the term of twentyone years from the date of these presents, unless the same shall be previously determined under the provisions hereinafter contained. 2. THE firm and style of the partnership shall be & Co. 3. THE partnership business shall be carried on at or upon the leasehold premises being No. —, street, in the city of held by the said A. B. and C. D. under a lease, dated the day of , at the yearly rent of £, or at such other place as shall from time to time be agreed on by the said partners. 4. THE bankers of the firm shall be Messrs. & Co., at or such other bankers as shall be from time to time agreed on by the partners. Each partner shall be at liberty to draw cheques in the name of the firm. 5. THE capital of the firm shall consist of the sum of £ to be brought in by the partners in equal shares [or in the shares following, namely, state the shares], and to be made up as follows (that is to say), the implements and plant now used in the said business shall be deemed to be of the value of £and to be brought in by the said partners in equal shares [or in the shares aforesaid], and the further sum of £— shall be paid to the credit of the firm by the said partners in equal shares [or in the shares aforesaid] immediately after the execution of these presents. 6. If either partner shall at any time, with the consent of the other partner, advance any money to the firm beyond the amount of the capital hereby agreed to be brought in by him, the same shall be a debt to him from the firm, and may be withdrawn by him at any time at one calendar month's notice, and shall in the meantime bear interest after the rate of £5 per cent. per annum, computed from the time of such advance. BETWEEN TWO PERSONS. 7. THE profits of the business shall belong to the partners in Profits. equal shares [or as to parts thereof to the said A. B., and as to the remaining part thereof to the said C. D.]. losses. 8. THE rent of the said leasehold premises, or of any other Expenses and premises where the business shall for the time being be carried on, and all rates, taxes, payments for insurance, and other outgoings whatsoever, in respect of the same, and all expenses incurred in or about the said business, and all losses, if any, arising therein shall be paid and borne out of the earnings of the said business, or if the same shall be deficient, shall be paid and borne by the partners in equal shares. partner to draw monthly sums. 9. EACH partner may draw out of the partnership cash the Power to each monthly sum of £ on account of his share of profits for the current year, and if on taking any yearly account it shall appear that the sums drawn out by him exceed his share of profits for that year he shall forthwith repay the excess. account to be kept. 10. PROPER books of account shall be kept by the partners, Books of and entries made therein of all such matters, transactions, and things as are usually written and entered in books of account kept by persons engaged in concerns of a similar nature, and such books, together with all securities, letters, and other things belonging to or concerning the said partnership, shall be kept at the office where the partnership business shall for the time being be carried on, and each of the partners shall have free access to inspect, examine, and copy the same, whenever he shall think fit. business, and to be each other. 11. BOTH partners shall devote their whole time and attention Partners to give whole to the partnership business, and neither of them shall, directly time to or indirectly, be engaged in any other business. They shall be faithful to each other in all partnership transactions, and at all faithful to times furnish to each other correct accounts and statements of and concerning all such transactions without any concealment or suppression. Neither partner shall employ any money or effects belonging to the firm, or engage its credit except on account of the partnership business, and the bonâ fide carrying on of the BETWEEN TWO PERSONS. Neither partner to discharge clerk or ser vant without consent of other. Not to give credit after notice to the contrary. Not to release or compound debt. Annual accounts. Reserve fund. same, or do or suffer anything whereby any such money or effects or his interest therein may be taken in execution or in any wise assigned, charged, or incumbered for or in respect of his private debts. Neither partner shall without the consent of the other become bail or surety for any person. 12. NEITHER partner shall without the consent of the other discharge any clerk or servant in the employment of the firm except for flagrant misconduct. 13. NEITHER partner shall lend any money or deliver on credit any goods belonging to the firm to any person whom the other partner shall by notice in writing have forbidden him to trust, and if either partner shall do so, he shall make good to the firm all loss arising thereby. 14. NEITHER partner shall without the consent in writing of the other release or compound any debt owing to or claim of the firm, and if either partner do so, he shall, if required by the other, make good to the firm the full amount of such debt or claim. 15. On the 31st day of December in every year during the continuance of the said partnership, a general account shall be taken up to the same 31st day of December, of the stock in trade, credits, property and effects, debts and liabilities of the said partnership, and every such annual account shall be entered in two books, and be signed in each such book by each partner, and after such signature each of them shall keep one of the said books, and shall be bound by such account, except that if any manifest error be found therein by either partner, and signified to the other within three calendar months after the same shall have been so signed by both of them, such error shall be rectified. Immediately after the signing of such account each partner may draw out his share of the profits as thereby appearing [subject, however, to the next article]. [16. IMMEDIATELY after taking such annual account, one tenth part of the profits for the past year shall be set apart as a reserve fund to meet future losses and extraordinary expenses, until the reserve fund shall amount to £. The reserve fund shall be invested from time to time in securities agreed on by the partners, and the interest or income arising therefrom shall be deemed part of the profits of the said business and be divided accordingly. If the reserve fund after having been at its full amount shall be diminished, one tenth part of the annual profits shall again be added thereto until it reaches its full amount, and so on from time to time as occasion may require (a).] BETWEEN TWO PERSONS. may purchase 17. Ir either partner shall die or become bankrupt during the On death or partnership term, the other partner shall be at liberty to pur- a partner the bankruptcy of chase the share of the deceased or bankrupt partner in the other partner partnership property upon giving to his legal personal represen- his share. tative or trustee (as the case may require) a notice in writing to that effect at any time within three calendar months from the death or bankruptcy, such purchase to take effect as from the day of such death or bankruptcy. Power to other party to retire, in which case his share may be purchased In by the other. [18. EITHER partner may retire from the firm at the end of any year of the partnership term, upon giving to the other partner or leaving at the place where the business is carried on twelve calendar months' previous notice in writing in that behalf. such case the other partner shall be at liberty to purchase the share of the retiring partner in the property of the firm giving to him or leaving at the said place of business a notice in writing to that effect at any time before the determination of the partnership by reason of the first-mentioned notice (b).] upon (a) This will only be inserted when from the nature of the business it is thought necessary. (b) The above clause will be inserted only when expressly stipulated for. Sometimes the following clause will meet the intention of the parties: Ir upon taking any such annual account as aforesaid it shall appear that the partnership business has not been carried on during the then preceding year so as to produce profit after allowing to each partner interest after the rate of £5 per cent. per annum on the amount of his capital for the time being in the said business, it shall be lawful for either partner, at any time within one calendar month from the time of the taking such account, to give a notice in writing to the other partner of his desire that the said partnership shall determine, or to leave such notice at the place where the partnership business shall for the time being be carried on, and in such case the partnership shall cease and determine immediately upon the giving or leaving of such notice. Power to either partner the event of no profits. |