Articles of partnership is a voluntary contract between two or among more than two persons to place their capital, labor, and skills, and corporation in business with the understanding that there will be a sharing of the profits and losses between/among partners. Outside of North America, it is normally referred to simply as a partnership agreement.
There are also multiple sections which are often included as well in articles of partnership, based on the circumstance. These are:
▪ Host agreement – includes the granting of one partner the rights to manage and administer the business or a specific department. ▪ Majority management – includes the authorization of a majority of partners to manage the affairs of the entire partnership. This is particularly common where there are numerous partners. ▪ Annual account – includes provisions to account for, annually, the property and debts of the business. ▪ Consistent interest – includes the forbidding of any partner to carry out business unrelated to the partnership. This is usually implied in articles of partnership. ▪ Misconduct expulsion – includes the allowance of expelling partners who commit gross misconduct or becomes insolvent, bankrupt, etc. This is particularly common where there are numerous partners. ▪ Resolution of dispute – includes the submission of arguments to arbitration. ▪ Causes income losses - includes the decline of income if companies losses profit.
ARTICLES OF PARTNERSHIP
The name given to an instrument of writing by which the parties enter into a partnership, upon the conditions therein mentioned. This instrument generally contains certain provisions which it is the object here to point out. 2. But before proceeding more particularly to the consideration of the Subject, it will be proper to observe that sometimes preliminary agreements to enter into a partnership are formed, and that questions, not unfrequently, arise as to their effects. These are not partnerships, but agreements to enter into partnership at a future time. When such an agreement has been broken, the parties may apply for redress to a court of law, where damages will be given, as a compensation. Application is sometimes made to courts of equity for their more efficient aid to compel a specific performance. In general these courts will not entertain bills for specific performance of such preliminary contracts; but in order to suppress frauds, or manifestly mischievous consequences, they will compel such performance. 3 Atk. 383; Colly. Partn. B. 2, c. 2, Sec. 2 Wats. Partn. 60; Gow, Partn. 109; Story, Eq. Jur. Sec. 666, note; Story, Partn. Sec. 189; 1 Swanst. R. 513, note. When, however, the partnership may be immediately dissolved, it seems the contract cannot be specifically enforced. 9 Ves. 360. 3. It is proper to premise that under each particular head, it is intended briefly to examine the decisions which have been made in relation to it. 4. The principal parts of articles of partnership are here enumerated. 1. The names of the contracting parties. These should all be severally set out. 5.-2. The agreement that the parties actually by the instrument enter into partnership, and care must be taken to distinguish this agreement from a covenant to enter into partnership at a future time. 6.-3. The commencement of the partnership. This ought always to be expressly provided for. When no other time is fixed by it, the commencement will take place from the date of the instrument. Colly. Partn. 140 5 Barn. & Cres. 108. 7.-4. The duration of the partnership. This may be. for life, or for a, specific period of time; partnerships may be conditional or indefinite in their duration, or for a single adventure or dealing; this period of duration is either express or implied, but it will not be presumed to be beyond life. 1 Swanst. R. 521. When a term is fixed, it is presumed to endure until that period has elapsed; and,...
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