Partnership Agreements

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Which section of the Partnership Act 1890 determines the relationship between partners and third parties as well as liability for partnership debts?

Section 2

Sections 5-18 (correct)

Section 19

Section 1

Can the partners' mutual rights and obligations be varied at any time?

No, only by a court order

Yes, by unanimous consent (correct)

Yes, by a majority vote

No, they are fixed

What is the purpose of a formal written partnership agreement?

To set out the terms on which the partners have agreed to run the business (correct)

To override the default provisions of the Partnership Act 1890

To regulate the relationship between partners and third parties

To determine the liability for partnership debts

According to the PA 1890, what is the default provision for sharing capital and profits in a partnership?

Partners share equally in the capital and profits, regardless of their contributions. Signup and view all the answers

What is the purpose of specifying partnership property in an agreement?

To minimize potential disputes between partners. Signup and view all the answers

What are the default provisions of the PA 1890 regarding drawings or salary for partners?

Partners are not entitled to any form of remuneration. Signup and view all the answers

What is the purpose of including a commencement and duration clause in a partnership agreement?

To determine the duration of the partnership agreement. Signup and view all the answers

Which of the following is a type of clause that can be included in a partnership agreement to prevent former partners from competing with the business?

All of the above Signup and view all the answers

Under what circumstances can a partnership be dissolved automatically?

All of the above Signup and view all the answers

What happens to the assets of a partnership when it is dissolved?

They are realized and each partner is paid back their original capital first Signup and view all the answers

What is the default method for sharing surplus assets following the dissolution of a partnership if there is no agreed provision in the partnership agreement?

In accordance with the asset surplus ratio Signup and view all the answers

Under PA 1890, every partner may take part in the management of the partnership business (s 24(5)) but are not required to do so. The partnership agreement should therefore set out the requirements for each partner in terms of the work they do for the business.

c) Every partner may take part in the management of the partnership business, but it is not mandatory. Signup and view all the answers

What decisions require unanimity among the partners?

d) All of the above. Signup and view all the answers

Under s 24(7) PA 1890, what is required for a new partner to join the partnership?

b) Unanimous consent of all partners. Signup and view all the answers

What happens when a partner leaves the partnership?

b) The remaining partners continue the business as a new partnership. Signup and view all the answers

Partnership Agreements

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