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Partnership Disputes

Partnerships exist everywhere in the commercial world. Partners will tell us "We will never fall out - we're in it together!", but things to do go wrong, and in the absence of an express agreement as to how the partnership is regulated, the provisions of an old and dusty piece of legislation will apply: the Partnership Act 1890. 

Some of the more common partnership disputes involve the following:

Secret Profits

Partners are not permitted to make secret profits from their business without the express knowledge and consent of their fellow partners.  Where one partner does this, it may be sufficient reason to justify expelling that partner from the partnership and seek an order from the Court directing that such profit be paid over to the partnership. 

Management/Personality Conflicts

Sometimes it is just not possible to continue working with other partners for all sorts of reasons.  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. 

Post Dissolution Issues

Following a falling out, one partner may, without the consent of the others, continue with the business.  This can lead to all manner of 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 not uncommon for partners to have injected different working or actual 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.

Our team regularly helps both professional and other individuals with all kinds of partnership issues. We have advised on issues relating to dissolution, breach of fiduciary duty, declarations, winding up and actions for accounts and enquiries in a wide range of practice areas including accountancy, medicine and dentistry, finance and investment, insolvency and health care. 

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