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    DLW2013 Commercial Law

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    Thayalan Shanmugam
    1) The document discusses the relations between partners, including their duties to each other as defined by partnership agreements or relevant law. 2) It also covers the various methods of terminating or dissolving a partnership, such as by agreement, operation of law, death or bankruptcy of a partner, or court order for reasons like misconduct. 3) The final section compares key differences between partnerships and corporations, such as their legal definitions, ownership structures, formation processes, management structures, and types.

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    DLW2013 Commercial Law

    Uploaded by

    Thayalan Shanmugam
    32 views20 pages
    1) The document discusses the relations between partners, including their duties to each other as defined by partnership agreements or relevant law. 2) It also covers the various methods of terminating or dissolving a partnership, such as by agreement, operation of law, death or bankruptcy of a partner, or court order for reasons like misconduct. 3) The final section compares key differences between partnerships and corporations, such as their legal definitions, ownership structures, formation processes, management structures, and types.

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    DLW2013 COMMERCIAL LAW

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    1) The document discusses the relations between partners, including their duties to each other as defined by partnership agreements or relevant law. 2) It also covers the various methods of terminating or dissolving a partnership, such as by agreement, operation of law, death or bankruptcy of a partner, or court order for reasons like misconduct. 3) The final section compares key differences between partnerships and corporations, such as their legal definitions, ownership structures, formation processes, management structures, and types.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    32 views20 pages

    DLW2013 Commercial Law

    Uploaded by

    Thayalan Shanmugam
    1) The document discusses the relations between partners, including their duties to each other as defined by partnership agreements or relevant law. 2) It also covers the various methods of terminating or dissolving a partnership, such as by agreement, operation of law, death or bankruptcy of a partner, or court order for reasons like misconduct. 3) The final section compares key differences between partnerships and corporations, such as their legal definitions, ownership structures, formation processes, management structures, and types.

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    © All Rights Reserved
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    Download as pptx, pdf, or txt
    of 20

    DLW2013 COMMERCIAL LAW

    Topic : Relation Between Partners


    PREPARED FOR : MADAM SITI FATIMATUZ
    PREPARED BY :
     ANIS ATHIRAH AZMAN HOH
     SIVARANJINI KALIAPPAN
     THAYALAN SHANMUGAM
    Overview of presentation
    • Relation between partner

    • Termination and annulment of a partnership

    • Partnership vs Company: a comparison


    Introduction
    • If possible, introduce your presentation with interesting facts or videos to
    attract ur friends attention
    RELATIONS BETWEEN PARTNERS
    • The relations between partners to one another are determined by their
    partnership agreement.
    • The agreement normally provides for the rights and duties of the partners, the
    conduct and management of the firm, the capital and their profit sharing
    arrangement.
    • In the absence of provisions being made under the agreement – Partnership
    Act Applies
    • Example :

    1. Duty of partners to render accounts – S.20


    2. Accountability of partners for private profits – S.31
    CASE : Green V Howell
    • The partnership agreement provided that if either partner committed any
    breach of the articles or any flagrant breach of his duties as a partner, the
    other partner might, by notice in writing, terminate the partnership.
    • When one of the partners committed such a breach, the other partner
    served him with a notice of dissolution on the grounds that he had
    committed breaches of certain specified articles.
    Held :
    Unless there was evidence of bad faith, it was not necessary for the other
    partner to disclose the reasons and causes of the flagrant act. The notice was
    therefore valid.
    TERMINATION & ANNULMENT OF A
    PARTNERSHIP
    • Method of dissolving a Partnership

    • A partnership may be terminated or dissolved as follows :

    1. By agreement :

    a) If the duration of the partnership has been specified in the partnership


    agreement, the partnership is terminated on the expiry of that period.
    b) If the partners mutually agree to dissolve the partnership.
    2. By operation of law (unless otherwise agreed between the partners)
    (a) If the partnership was entered into for a fixed term and the term
    expires – S.34(1)(a)
    (b) If the partnership was entered into a single adventure or undertaking,
    and that adventure or undertaking terminates – S.34(1)(b)
    (c) If the partnership was entered into for an undefined time, by any
    partner giving notice to the other partner(s) of his intention to
    determine (or end) the partnership.
    3. By death or bankruptcy (unless otherwise agreed between the
    partners – S.35(1)
    CASE : Lee Choo Yam Holdings Sdn Bhd & Ors V
    Khoo Yoke Wah & Ors
    • Facts : The plaintiffs applied for a declaration that the partnership was dissolved by the death of any partner.

    Held : Allowing the plaintiffs' application :

    I. Upon the true construction of section 35(1) of the Partnership Act 1961, the agreement made between the
    partners to the contrary must have been made before the death of any partner. An agreement made by the
    surviving partners after the death of a partner without the agreement of the deceased partner will not bind the
    deceased partner nor will it make the partnership a continuing partnership.

    II. On the death of any partner, a partnership therefore stands dissolved un-less there is evidence that the partners
    had agreed otherwise. The onus is on the defendants to prove not only the existence of an agreement between
    the surviving partners but the existence of an agreement between all the partners including the deceased
    partner. (This is so because by the death of ' the partner it is no longer possible to adhere to the original
    contract, the essence of which must be that all parties to it must be alive.)
    4. By Supervening Illegality

    a) If an event occurs which make it unlawful for the business of the film to
    be carried on or for the members of the firm to carry on in partnership,
    the partnership is dissolved – S.36
    5. By charging on Shares
    b) Where a partners suffers his share of his partnership property to
    be charged with payment of his personal debt, the other partners
    have the option of dissolving the partnership – S.35(2)
    Dissolution By The Court
    The court may virtue off section 37 of the partnership act 1961 may dissolve a
    partnership on the application by the other partner.
    a) Partners mental incapacity : the court may dissolve the firm when the
    partners becomes in sane by virtue of Section 37(a). The partner
    concerned must be unable to perform his duties,because of mental
    disorder, of managing his property and affairs. The insanity must be of
    permanent nature, otherwise there can be no grounds to dissolve the
    partnership.

    b) Partners Physical Incapacity : According to section37(b) Partnership act


    1961, the incapacity must be permanent.
    CASE : WHITWELL V ARTHUR (1865) 35 Beav 140
    •  a partner was paralysed for some months

    •  By the time the case reached the court the partner had recovered and the
    court did not grant the dissolution
    c) Conduct Prejudicial to the business : Section 37(c) Partnership Act
    1961 provides that a partnership may be dissolved when a partner is found
    to be guilty of any misconduct. This situation will be considered by the
    courts affecting prejudicially the carrying on of the business. Moral
    misconduct is not enough unless, in the view of the court, it is likely to effect
    the business.

    CASE : SNOW V MILFORD (1868) 18 LT 142


    a partner’s massive adultery all over Exeter was not regarded by the
    court as sufficient grounds for dissolution under the section.
    • Dishonesty could be construed as conduct prejudicially affecting the
    carrying on of a partnership business which would then entitle the other
    partners to apply to the court for a decree of dissolution.

    CASE : Carmichael v Evans [1904] 1 Ch 486.


    A partner in a drapery business was served with a notice of expulsion in
    consequence of his conviction for travelling on a railway without paying his
    fare and 'with intent to avoid payment thereof‘.
    Of first instance inclined strongly to the view that the notice was valid.
    d)  Breach of agreement : The court may dissolve a partnership by section
    37(d) partnership Act 1961 when one partner breaches the partnership
    agreement either willfully or persistently. Here the word willful means a
    serious breach inflicting damage to the business or on the firm. However
    the court will not interfere if the breach was a minor one and has no impact
    on the business of the firm. Thus occasionally bad tempered or behaving
    rudely will not suffice.
    Note: No partner can force dissolution by his own default.
    e) Business carried on at a loss : This is provided by section 37(e)
    Partnership Act 1961. if the business can only be carried on at a loss that it
    can be petitioned to the court to dissolve the partnership. As we know the
    essential of having a partnership is in order for two or more people to get
    together in the common view of making profit. If this purpose is defeated
    then it is proper for the courts to dissolve the partnership.
    • The court will decree a dissolution under this provision where there is a
    practical impossibility of making a profit and this impossibility must be proven.

    CASE : Handyside v Campbell (1901) 17 TLR 623.


    The plaintiff applied to the court for a decree of dissolution on grounds that
    the partnership could only be carried on at a loss. The other partners
    admitted that there was a loss at that time but alleged that it was owing in
    part to past mismanagement by the plaintiff and in part to his long absence
    from business due to illness and that his absence still continued.
    The evidence did not amount to a practical impossibility of profit and
    refused to grant a decree of dissolution.
    • f) Just and equitable grounds : The court will grant a decree of dissolution where
    circumstances have arisen which, in the opinion of the court, render it just and equitable
    that the partnership be dissolved.
    • In deciding whether a partnership ought to be dissolved on just and equitable grounds the
    court will scrutinize wholly.

    CASE : Lee Lay Lay v Wong Yiik Tai (unreported, 24 May 2007
    Originating Summons No 24-433-2005-I), [2007] MLJU 585.
    • Where the application to dissolve the partnership is made on 'just
    and equitable' grounds which are seriously disputed, it would be
    wrong or inappropriate for the court to decide the issue purely on
    affidavit evidence.
    • The court has taken an approach similar to considering whether a
    company incorporated under companies legislation should be
    wound up on just and equitable principles.
    CASE : Re Yenidje Tobacco Co Ltd [1916] 2 Ch 426at 430, CA (Eng).

    • the circumstances which would justify the winding-up of a partnership


    are circumstances which should induce the court to exercise its
    jurisdiction under the just and equitable clause and to wind-up the
    company.
    Parthership and company : a comparison
      Corporation Partnership

    Definition A legal entity which is separate from its owners. A business entity with individuals who share the risk and benefits of business.

    Ownership Stockholders Partners

    Formed Formed under operational state laws with Articles of Incorporation. An agreement among the members.

    Types subchapter-s corporation, professional corporation general partnership, limited partnership, limited liability partnerships

    Management Run by a board of directors Run by the partners

    Structure Members of a corporation have to act in accordance with the corporation's Partnerships have to adhere to a partnership agreement. More flexible, less

    charter. More structured, less flexible. Easier to transfer ownership of part of structured. Each part of the business has to be individually transferred or

    a corporation. sold.

    Raising money By sale of financial instruments like stocks and bonds. From current members, getting new members, a loan

    Liability The stockholders are not held responsible in case of a fault, the corporation is. The partners share the liability, and are directly responsible in case of fault.

    Dissolution Stockholder approval, government approval Decision of the partners


    CONCLUSION
    In conclusion we have berapa points nis..
    Yg warna merah terang tu sume madam suruh edit and I dah edit..
    And kat intro tu add this link sbb kita guna partnership act 1961
    http://www.agc.gov.my/Akta/Vol.%203/Act%20135.pdf
    And that’s all nis..
    Thank you.
    REMARKS
    • PLS CHANGE THE SIZE OF THE WORD TO AT LEAST 24’..NOT 16’

    • USE UR FULL CREATIVITY TO MAKE UR SLIDES MORE ATTRACTIVE


    YOUR SLIDE QUITE SIMPLE
    • U MAY USE SMART ART TO DO CHART OR GRAPHIC

    • REFER TO THE WORDS MARKED IN RED IN THE SLIDES

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