PARTNERSHIP

ELEMENTS OF PARTNERSHIP.
S. 3(1) Partnership is (1) relationship which subsists between (2) persons carrying on business in common (3)with a view of profit.

(1) RELATIONSHIP WHICH SUBSISTS BETWEEN PERSON - The relation can exist either orally or verbally, in conduct or in writing. - S. 47(2) number of partner in a partnership must not exceed 20 persons. However for a professional firm the number of partners must not more than 50 persons. - A firm may validly exist with or without written agreement as long as there is a relation between the parties. - Other than contractual agreement, existence of partnership maybe incurred from the intention of the parties.

HORGAN v. MURRAY
Facts : Pf and Df were formerly partners. However they incorporated a consultation company. Pf brought a partnership action against Df. Pf claimed that, he and the Df had agreed initially to start a p/ship business and the business would be conducted through the medium of a company. Held : The Pfs claim is struck out on the basis that their business relationship would be conducted through the medium of a company and there was no other relationship between them which could constitute a partnership.

AW YONG WAI CHOO v, ARIEF TRADING SDN. BHD.

HELD : To find the existence of relation within S. 3(1) PA, the court must ascertain the real intention of the parties. The real intention is not necessarily the express intention of the parties so that even if the parties expressed that they were partners, the court may decide to the contrary after taking into consideration all the relevant factors.

Norintan Wahab UiTM, Johor

(2) CARRYING ON BUSINESS IN COMMON - S.2 PA the word business includes every trade, occupation or profession. - S.3(2) company or association which is registered under the Companies Act 1965 or a co-operative society under any written law is not a partnership.

SOH HOD BENG v. KHOO CHYE NEO

A Chinese loan association is not considered as a partnership under the Partnership Act for the carrying on a business for gain.

MOLLOW MARCH & CO. V. THE COURT OF WARDS

To constitute a partnership, parties must have agreed to carry on business or to share profits in some way in common.

MANN v. DARCHY
Pf and few others agreed to start a potato business. After they gain a profit the other partners refuse to share the profit. They contended that the business was not continuously done therefore it is not a partnership. Held: It is not necessary that the business was continuously running, as long as there is a business, there is a partnership.

CHOOI SIEW CHEONG V. LUCKY HEIGHTS DEVELOPMENT SDN. BHD.

Held : No partnership resulted from the joint venture agreement between the land owner and the housing development because each parties intended a wholly separate business. - Other than referring to similar types of business, the elements of carrying business in common also refers to the participation in business. - For p/ship to exist, it is not essential that all partners must take active part in the management of business, what is important is important is that the business is carried on either by one or all the partners.

BADELEY v. CONSOLIDATED BANK

if one person carries on a business and shares the profits of that business with another, prima facie these two are partners

Norintan Wahab UiTM, Johor

HITCHINS V. HITCHINS & ANOR.

Held : The activity of the three, namely investing in a share in the hotel p/ship and receiving drawings from it, did not constitute the carrying of a business in common. - Even if the word partnership does not appear in the agreement, a partnership may still exist.

RATNA AMAL @ ANOR v. TAN CHOW SOO

Instead of using the word partnership, the parties in this case had agreed to form a syndicate for the purpose of selling a condensed milk. Held : They had agreed to carried on the business in common with a view of profit. And from the facts of the case the business character is one of a partnership.

(3) WITH A VIEW OF PROFIT - Profit is the main objects of having a p/ship. - the word profit means the net profit the net amount remaining after paying out the expenses of the business.

GULAZAM v. NOORAZMAN & SOBATH

Facts : 3 parties orally agreed to form a p/ship to engage in the buying and selling cattle. They also agreed that each would contribute to the partnership capital & to share the profits. Held : All the essential elements, including with a view of profit were present to constitute a partnership.

JOYCE V. MORRISSEY
Facts : Joyce and Morrissey were the members of a rock band. Morrissey contended that since he was the mover of the band he should be entitled for the 40% each, and Joyce would only entitled for 10% profit. He further claimed that Joyce had not make any complaint on the division of the said profit when the group accountant sent the accounts to Joyce which stated that Joyce only entitle for 10%. Held : The PA 1890 applied to the facts of the case and consequently all the members of the said rock band were entitle to an equal share of the profit.

Norintan Wahab UiTM, Johor