Partnership Act 1892

Preamble WHEREAS it is expedient to declare and amend the law of Partnership: Be it therefore enacted by the Queen s !ost Excellent !a"esty# by and with the ad$ice and consent of the %e&islati$e 'ouncil and %e&islati$e Assembly of (ew South Wales in Parliament assembled# and by the authority of the same# as follows:

Part 1 Preliminary
1A Name of Act )his Act may be cited as the Partnership Act 1892* 1B Interpretation +,- .n this Act:"business" includes trade# occupation and profession*"Court" means the court ha$in& "urisdiction in the case concerned*"general partner" is defined in section /0*"incorporate limite partnership" is defined in section /0*"limite partner" is defined in section /0*"limite partnership" is defined in section /0* +1- .n this Act# a reference# in relation to an incorporated limited partnership# to the partnership or the firm is a reference to the incorporated limited partnership as a separate le&al entity and not to the partners in that partnership* +2- (otes included in this Act do not form part of this Act* 1C Application of la!s of partnership to incorporate limite partnerships Except as pro$ided +whether expressly or by necessary implication- by this Act or any other enactment# the law relatin& to partnership does not apply to or in respect of an incorporated limited partnership# the partners in an incorporated limited partnership or to the relationship between an incorporated limited partnership and its partners*

Part 2 Partnerships generally

"i#ision 1 Nature of partnership 1 "efinition of partnership +,- Partnership is the relation which exists between persons carryin& on a business in common with a $iew of profit and includes an incorporated limited partnership* +1- But the relation between members of any company or association which is: +a- incorporated under the Corporations Act 2001 of the 'ommonwealth# or +b- 3ormed or incorporated by or in pursuance of any other Act of Parliament or %etters Patent or Royal 'harter# is not a Partnership within the meanin& of this Act* 2 $ules for etermining e%istence of partnership +,- .n determinin& whether a partnership does or does not exist# re&ard shall be had to the followin& rules: +,- 4oint tenancy# tenancy in common# "oint property# or part ownership does not of itself create a partnership as to anythin& so held or owned# whether the tenants or owners do or do not share any profits made by the use thereof* +1- )he sharin& of &ross returns does not of itself create a partnership# whether the persons sharin& such returns ha$e or ha$e not a "oint or common ri&ht or interest in any property from which or from the use of which the returns are deri$ed*

+2- )he receipt by a person of a share of the profits of a business is prima facie e$idence that the person is a partner in the business# but the receipt of such a share# or of a payment contin&ent on# or $aryin& with the profits of a business does not of itself ma5e the person a partner in the business6 and in particular: +a- )he receipt by a person of a debt or other li7uidated demand by instalments or otherwise out of the accruin& profits of a business does not of itself ma5e the person a partner in the business or liable as such: +b- A contract for the remuneration of a ser$ant or a&ent of a person en&a&ed in a business by a share of the profits of the business does not of itself ma5e the ser$ant or a&ent a partner in the business or liable as such: +c- A person bein& the widow# widower or child of a deceased partner# and recei$in& by way of annuity a portion of the profits made in the business in which the deceased person was a partner# is not by reason only of such receipt a partner in the business or liable as such: +d- )he ad$ance of money by way of loan to a person en&a&ed or about to en&a&e in any business on a contract with that person# that the lender shall recei$e a rate of interest $aryin& with the profits# or shall recei$e a share of the profits arisin& from carryin& on the business# does not of itself ma5e the lender a partner with the person or persons carryin& on the business or liable as such: Pro$ided that the contract is in writin& and si&ned by or on behalf of all the parties thereto: +e- A person recei$in& by way of annuity or otherwise a portion of the profits of a business in consideration of the sale by the person of the &oodwill of the business is not by reason only of such receipt a partner in the business or liable as such* +1- )his section does not apply to or in respect of an incorporated limited partnership* & Postponement of rights of persons len ing or selling in consi eration of share of profits in case of insol#ency .n the e$ent of any person to whom money has been ad$anced by way of loan upon such a contract as is mentioned in the last fore&oin& section# or of any buyer of a &oodwill in consideration of a share of the profits of the business bein& ad"ud&ed a ban5rupt# enterin& into an arran&ement to pay the person s creditors less than one hundred cents in the dollar# or dyin& in insol$ent circumstances# the lender of the loan shall not be entitled to reco$er anythin& in respect of the loan# and the seller of the &oodwill shall not be entitled to reco$er anythin& in respect of the share of profits contracted for# until the claims of the other creditors of the borrower or buyer for $aluable consideration in money or money s worth ha$e been satisfied* ' (eaning of firms Persons who ha$e entered into partnership other than an incorporated limited partnership with one another are for the purpose of this Act called collecti$ely a firm# and the name under which their business is carried on is called the firm8name*
9n the meanin& of :firm: in relation to an incorporated limited partnership see section ,B +1-* 9n the meanin& of :firm8name: of an incorporated limited partnership see section /0*

"i#ision 2 $elationship of partners to persons ealing !ith them ) Po!er of partner to bin firm +,- E$ery partner in a partnership other than a firm that is a limited partnership or incorporated limited partnership is an a&ent of the firm and of the other partners for the purpose of the business of the partnership6 and the acts of e$ery partner who does any act for carryin& on in the usual way business of the 5ind carried on by the firm of which the partner is a member# binds the firm and the other partners# unless the partner so actin& has

in fact no authority to act for the firm in the particular matter# and the person with whom the partner is dealin& either 5nows that the partner has no authority# or does not 5now or belie$e the partner to be a partner* +1- E$ery &eneral partner in a limited partnership or incorporated limited partnership is an a&ent of the firm and of the other &eneral partners for the purpose of the business of the partnership# and the acts of e$ery &eneral partner who does any act for carryin& on in the usual way business of the 5ind carried on by the firm of which the partner is a member# bind the firm and the other &eneral partners# unless: +a- the &eneral partner has in fact no authority to act for the firm in the particular matter# and +b- the person with whom the &eneral partner is dealin& either 5nows that the &eneral partner has no authority# or does not 5now or belie$e the &eneral partner to be a &eneral partner* * Partners boun by acts on behalf of firm +,- An act or instrument relatin& to the business of a firm other than an incorporated limited partnership# and done or executed in the firm8name# or in any other manner# showin& an intention to bind the firm by any person thereto authorised# whether a partner or not# is bindin& on the firm and all the partners* +1- An act or instrument relatin& to the business of a firm that is an incorporated limited partnership# and done or executed in the firm8name# or in any other manner# showin& an intention to bind the firm by any person authorised to bind the firm# whether a &eneral partner or not# is +sub"ect to section 0 +2-- bindin& on the firm and all the &eneral partners* +2- )his section does not affect any &eneral rule of law relatin& to the execution of deeds or ne&otiable instruments* + Partner using cre it of firm for pri#ate purposes +,- Where one partner pled&es the credit of a firm other than a firm that is an incorporated limited partnership for a purpose apparently not connected with the firm s ordinary course of business# the firm is not bound unless the partner is in fact specially authorised by the other partners6 but this section does not affect any personal liability incurred by an indi$idual partner* +1- Where a &eneral partner pled&es the credit of a firm that is an incorporated limited partnership for a purpose apparently not connected with the firm s ordinary course of business# the firm is not bound unless the &eneral partner is in fact specially authorised by the firm# but this section does not affect any personal liability incurred by an indi$idual &eneral partner* 8 ,ffect of notice that firm !ill not be boun by acts of partner +,- .f it has been a&reed between the partners that any restrictions shall be placed upon the power of any one or more of them to bind a firm other than a firm that is an incorporated limited partnership# no act done in contra$ention of the a&reement is bindin& on the firm with respect to persons ha$in& notice of the a&reement* +1- .f it has been a&reed by the partners in an incorporated limited partnership that any restrictions are to be placed on the power +if any- of any one or more of them to bind the firm# no act done in contra$ention of the a&reement is bindin& on the firm with respect to persons ha$in& notice of the a&reement* 9 -iability of partner +,- E$ery partner in a firm other than an incorporated limited partnership is liable "ointly with the other partners for all debts and obli&ations of the firm incurred while the partner is a partner6 and +if the partner is an indi$idual- after the partner s death the partner s estate is also se$erally liable in a due course of administration for such debts and obli&ations so far as they remain unsatisfied# but sub"ect to the prior payment of the partner s separate debts* +1- E$ery &eneral partner in an incorporated limited partnership is liable "ointly with the

incorporated limited partnership for all debts and obli&ations of the partnership incurred while the &eneral partner is a &eneral partner# and +if the &eneral partner is an indi$idualafter the &eneral partner s death the &eneral partner s estate is also se$erally liable in a due course of administration for such debts or obli&ations so far as they remain unsatisfied but sub"ect to the prior payment of the partner s separate debts* +2- ;espite subsection +1-# a &eneral partner in an incorporated limited partnership is only liable for any debts or obli&ations of the incorporated limited partnership: +a- to the extent the incorporated limited partnership is unable to satisfy the debts and obli&ations# or +b- to a &reater extent pro$ided by the partnership a&reement* 1. -iability of firm for !rongs +,- Sub"ect to subsection +1-# where by any wron&ful act or omission of any partner in a firm other than an incorporated limited partnership actin& in the ordinary course of the business of the firm# or with the authority of the partner s co8partners# loss or in"ury is caused to any person not bein& a partner of the firm# or any penalty is incurred# the firm is liable therefor to the same extent as the partner so actin& or omittin& to act* +1- 3or the purposes of subsection +,-# a partner in a firm other than an incorporated limited partnership who commits a wron&ful act or omission as a director of a body corporate# within the meanin& of the Corporations Act 2001 of the 'ommonwealth# is not to be ta5en to be actin& in the ordinary course of the business of the firm or with the authority of the partner s co8partners only because of any one or more of the followin&: +a- the partner obtained the a&reement or authority of the partner s co8partners# or some of them# to be appointed or to act as a director of the body corporate# +b- remuneration that the partner recei$es for actin& as a director of the body corporate forms part of the income of the firm# +c- any co8partner is also a director of that or any other body corporate* +2- Sub"ect to subsection +/-# where by any wron&ful act or omission of any &eneral partner in an incorporated limited partnership actin& in the ordinary course of the business of the incorporated limited partnership# or with its authority# loss or in"ury is caused to any person not bein& a partner in the incorporated limited partnership# or any penalty is incurred# the incorporated limited partnership is liable in respect of that loss or in"ury or penalty to the same extent as the &eneral partner so actin& or omittin& to act* +/- 3or the purposes of subsection +2-# a &eneral partner in an incorporated limited partnership who commits a wron&ful act or omission as a director of a body corporate# within the meanin& of the Corporations Act 2001 of the 'ommonwealth# is not to be ta5en to be actin& in the ordinary course of business of the incorporated limited partnership or with its authority only because of any one or more of the followin&: +a- the &eneral partner obtained the a&reement or authority of the incorporated limited partnership to be appointed or to act as a director of the body corporate# +b- remuneration that the &eneral partner recei$es for actin& as a director of the body corporate forms part of the income of the incorporated limited partnership# +c- any other &eneral partner in the incorporated limited partnership is also a director of that or any other body corporate* 11 (isapplication of money or property recei#e for or in the custo y of the firm +,- .n the followin& cases in$ol$in& the partners of a firm other than an incorporated limited partnership# namely: +a- Where one partner actin& within the scope of the partner s apparent authority recei$es the money or property of a third person and misapplies it# and +b- When a firm in the course of its business recei$es money or property of a third person# and the money or property so recei$ed is misapplied by one or more of the partners while it is in the custody of the firm# the firm is liable to ma5e &ood the loss*

+1- .n the followin& cases in$ol$in& &eneral partners in an incorporated limited partnership: +a- where one &eneral partner actin& within the scope of the &eneral partner s apparent authority recei$es the money or property of a third person and misapplies it# +b- when an incorporated limited partnership in the course of its business recei$es money or property of a third person# and the money or property so recei$ed is misapplied by one or more of the &eneral partners while it is in the custody of the incorporated limited partnership# the incorporated limited partnership is liable to ma5e &ood the loss* 12 -iability for !rongs /oint an se#eral +,- E$ery partner in a firm other than an incorporated limited partnership is liable "ointly with the partner s co8partners and also se$erally for e$erythin& for which the firm while the partner is a partner therein becomes liable under either of the two last precedin& sections* +1- E$ery &eneral partner in an incorporated limited partnership is liable "ointly with the other &eneral partners in the partnership and also se$erally for e$erythin& for which the firm becomes liable under section ,< +2- or ,, +1- while the &eneral partner is a &eneral partner in the firm* +2- ;espite subsection +1-# a &eneral partner in an incorporated limited partnership is only liable for any liability of the incorporated limited partnership referred to in that subsection: +a- to the extent the incorporated limited partnership is unable to satisfy the liability# or +b- to a &reater extent pro$ided by the partnership a&reement* 1& Improper employment of trust property for partnership purposes +,- .f a partner in a firm other than an incorporated limited partnership bein& a trustee improperly employs trust property in the business or on account of the partnership# no other partner is liable for the trust property to the persons beneficially interested therein:Pro$ided as follows: +,- )his section shall not affect any liability incurred by any partner by reason of the partner s ha$in& notice of a breach of trust# and +1- (othin& in this section shall pre$ent trust money from bein& followed and reco$ered from the firm if still in its possession or under its control* +1- .f a &eneral partner in an incorporated limited partnership bein& a trustee improperly employs trust property in the business or on account of the partnership# neither the partnership nor any other &eneral partner is liable for the trust property to the persons beneficially interested in it* +2- Subsection +1-: +a- does not affect any liability incurred by any &eneral partner by reason of the partner s ha$in& notice of a breach of trust# and +b- does not pre$ent trust money from bein& followed and reco$ered from the incorporated limited partnership if still in its possession or under its control* 1' Persons liable by "hol ing out" +,- E$ery one who by words spo5en or written# or by conduct represents himself or herself# or who 5nowin&ly suffers himself or herself to be represented as a partner in a particular firm that is a firm other than a limited partnership or incorporated limited partnership# is liable as a partner to any one who has on the faith of any such representation &i$en credit to the firm# whether the representation has or has not been made or communicated to the person so &i$in& credit by or with the 5nowled&e of the apparent partner ma5in& the representation or sufferin& it to be made* +,A- E$ery one who by words spo5en or written# or by conduct represents himself or

herself or who 5nowin&ly suffers himself or herself to be represented as a &eneral partner in a particular firm that is a limited partnership or an incorporated limited partnership# is liable as a &eneral partner to any one who has on the faith of any such representation &i$en credit to the firm# whether the representation has or has not been made or communicated to the person so &i$in& credit by or with the 5nowled&e of the apparent &eneral partner ma5in& the representation or sufferin& it to be made* +1- Pro$ided that where after a partner s death the partnership business is continued in the old firm8name# the continued use of that name or of the deceased partner s name as part thereof shall not of itself ma5e the partner s executors or administrators estate or effects liable for any partnership debts contracted after the partner s death* 1) A missions an representations of partners +,- An admission or representation made by any partner in a firm other than a limited partnership or incorporated limited partnership concernin& the partnership affairs# and in the ordinary course of its business# is e$idence a&ainst the firm* +1- An admission or representation made by any &eneral partner in a limited partnership or incorporated limited partnership concernin& the partnership affairs# and in the ordinary course of its business# is e$idence a&ainst the firm* 1* Notice to acting partner to be notice to firm +,- (otice to any partner in a firm other than a limited partnership or incorporated limited partnership who habitually acts in the partnership business of any matter relatin& to partnership affairs operates as notice to the firm# except in the case of a fraud on the firm committed by or with the consent of that partner* +1- (otice to any &eneral partner in a limited partnership or incorporated limited partnership who habitually acts in the partnership business of any matter relatin& to partnership affairs operates as notice to the firm except in the case of a fraud on the firm committed by or with the consent of that partner* 1+ -iabilities of incoming an outgoing partners +,- A person who is admitted as a partner into an existin& firm other than a limited partnership or incorporated limited partnership does not by that admission alone become liable for anythin& done before the person became a partner* +1- A person who is admitted as a &eneral partner into an existin& limited partnership or incorporated limited partnership does not by that admission alone become liable for anythin& done before the person became a &eneral partner* +2- A partner who retires from a firm other than a limited partnership or incorporated limited partnership does not by that retirement alone cease to be liable for partnership debts and obli&ations incurred before the partner s retirement* +/- A partner who retires from a limited partnership or incorporated limited partnership does not by that retirement alone cease to be liable for liabilities of the firm incurred before the partner s retirement for which the partner was liable* "-iability" is defined in
section /0*

+=- A retirin& partner in a firm other than a limited partnership or incorporated limited partnership may be dischar&ed from any existin& liabilities by an a&reement to that effect between the partner and the members of the firm as newly constituted and the creditors# and this a&reement may be either expressed or inferred as a fact from the course of dealin& between the creditors and the firm as newly constituted* +>- A retirin& partner in a limited partnership or incorporated limited partnership may be dischar&ed from any existin& liabilities by an a&reement to that effect between the partner and the firm and the creditors# and this a&reement may be either expressed or inferred as a fact from the course of dealin& between the creditors and the firm* 18 $e#ocation of continuing guaranty by change of firm +,- A continuin& &uaranty or cautionary obli&ation &i$en either to a firm or to a third person in respect of the transactions of a firm is# in the absence of a&reement to the

contrary# re$o5ed as to future transactions by any chan&e in the constitution of the firm to which# or of the firm in respect of whose transactions# the &uaranty or obli&ation was &i$en* +1- )his section does not apply to or in respect of an incorporated limited partnership* "i#ision & $elationship bet!een partners 19 0ariation by consent of terms of partnership )he mutual ri&hts and duties of partners# whether ascertained by a&reement or defined by this Act# may be $aried by the consent of all the partners# and such consent may be either expressed or inferred from a course of dealin&* 2. Partnership property of firms other than incorporate limite partnerships +,- All property# and ri&hts and interests in property# ori&inally brou&ht into the partnership stoc5 or ac7uired# whether by purchase or otherwise# on account of the firm# or for the purposes and in the course of the partnership business# are called in this Act partnership property# and must be held and applied by the partners exclusi$ely for the purposes of the partnership# and in accordance with the partnership a&reement* +1- Pro$ided that the le&al estate or interest in any land which belon&s to the partnership shall de$ol$e accordin& to the nature and tenure thereof# and the &eneral rules of law thereto applicable# but in trust so far as is necessary for the persons beneficially interested in the land under this section* +2- Where co8owners of an estate or interest in any land# not bein& itself partnership property# are partners as to profits made by the use of that land or estate# and purchase other lands and estate out of the profits to be used in li5e manner# the land or estate so purchased belon&s to them# in the absence of an a&reement to the contrary# not as partners# but as co8owners for the same respecti$e estates and interests as are held by them in the land or estate first8mentioned at the date of the purchase* +/- )his section does not apply to or in respect of an incorporated limited partnership* 2.A Partnership property of incorporate limite partnership +,- All property# and ri&hts and interests in property# ac7uired# whether by purchase or otherwise# on account of an incorporated limited partnership# or for the purposes and in the course of the business of the partnership# are called in this Act "partnership property"# and must be applied by the partnership exclusi$ely for the purposes of the partnership* +1- (o partner in an incorporated limited partnership# by $irtue only of bein& a partner in the partnership# has any le&al or beneficial interest in its partnership property* 21 Property bought !ith partnership money ?nless the contrary intention appears# property bou&ht with money belon&in& to the firm is deemed to ha$e been bou&ht on account of the firm* 22 Con#ersion into personal estate of lan hel as partnership property +,- Where land or any heritable interest therein has become partnership property# it shall# unless the contrary intention appears# be treated as between the partners +includin& the representati$es of a deceased partner-# and also as between the heirs of a deceased partner and the deceased partner s executors or administrators as personal or mo$able and not real or heritable estate* +1- )his section does not apply to or in respect of an incorporated limited partnership* 2& Proce ure against partnership property for a partner1s separate /u gment ebt +,- After the commencement of this Act a writ of execution shall not issue a&ainst any partnership property except on a "ud&ment a&ainst the firm* +1- )he Supreme 'ourt may# on the application of any "ud&ment creditor of a partner# ma5e an order char&in& that partner s interest in the partnership property and profits with payment of the amount of the "ud&ment debt and interest thereon and may by the same or

a subse7uent order appoint a recei$er of that partner s share of profits +whether already declared or accruin&-# and of any other money which may be comin& to the partner in respect of the partnership# and direct all accounts and in7uiries# and &i$e all other orders and directions which mi&ht ha$e been directed or &i$en if the char&e had been made in fa$our of the "ud&ment creditor by the partner# or which the circumstances of the case may re7uire* +2- )he other partner or partners shall be at liberty at any time to redeem the interest char&ed# or in the case of a sale bein& directed to purchase the same* +/- Subsections +1- and +2- do not apply to or in respect of an incorporated limited partnership* 2' $ules as to the interests an uty of partners other than partners in incorporate limite partnership sub/ect to special agreement +,- )he interests of partners in the partnership property and their ri&hts and duties in relation to the partnership shall be determined# sub"ect to any a&reement expressed or implied between the partners# by the followin& rules: +,- All the partners are entitled to share e7ually in the capital and profits of the business# and must contribute e7ually towards the losses whether of capital or otherwise sustained by the firm* +1- )he firm must indemnify e$ery partner in respect of payment made and personal liabilities incurred by the partner* +a- .n the ordinary and proper conduct of the business of the firm# or +b- .n or about anythin& necessarily done for the preser$ation of the business or property of the firm* +2- A partner ma5in&# for the purpose of the partnership# any actual payment or ad$ance beyond the amount of capital which the partner has a&reed to subscribe is entitled to interest at the rate of se$en per centum per annum from the date of the payment or ad$ances* +/- A partner is not entitled before the ascertainment of profits to interest on the capital subscribed by the partner* +=- E$ery partner may ta5e part in the mana&ement of the partnership business* +>- (o partner shall be entitled to remuneration for actin& in the partnership business* +@- (o person may be introduced as a partner without the consent of all existin& partners* +A- Any difference arisin& as to ordinary matters connected with the partnership business may be decided by a ma"ority of partners# but no chan&e may be made in the nature of the partnership business without the consent of all existin& partners* +0- )he partnership boo5s are to be 5ept at the place of business of the partnership +or the principal place# if there is more than one-# and e$ery partner may# when the partner thin5s fit# ha$e access to and inspect and copy any of them* +1- )his section does not apply to or in respect of an incorporated limited partnership* 2) ,%pulsion of partner (o ma"ority of the partners can expel any partner unless a power to do so has been conferred by express a&reement between the partners* 2* $etirement from partnership at !ill +,- Where no fixed term has been a&reed upon for the duration of the partnership# any partner may determine the partnership at any time on &i$in& notice of the partner s intention so to do to all the other partners* +1- Where the partnership has ori&inally been constituted by deed# a notice si&ned by the partner &i$in& it# shall be sufficient for this purpose* +2- )his section does not apply to or in respect of a limited partnership or incorporated

limited partnership* 2+ 2here partnership for term is continue o#er3 continuance on ol terms presume +,- Where a partnership entered into for a fixed term is continued after the term has expired# and without any express new a&reement# the ri&hts and duties of the partners remain the same as they were at the expiration of the term# so far as is consistent with the incidents of a partnership at will* +1- A continuance of the business by the partners or such of them as habitually acted therein durin& the term without any settlement or li7uidation of the partnership affairs# is presumed to be a continuance of the partnership* +2- )his section does not apply to or in respect of an incorporated limited partnership* 28 "uty of partners to ren er accounts +,- Partners in a firm other than an incorporated limited partnership are bound to render true accounts and full information of all thin&s affectin& the partnership to any partner or the partner s le&al representati$es* +1- An incorporated limited partnership is# sub"ect to the partnership a&reement# bound to render true accounts and full information in respect of all thin&s affectin& the partnership to any partner or the partner s le&al representati$es* 29 Accountability of partners for pri#ate profits +,- E$ery partner must account to the firm for any benefit deri$ed by the partner without the consent of the other partners from any transaction concernin& the partnership# or for any use by the partner of the partnership property# name# or business connexion* +1- )his section applies also to transactions underta5en after a partnership has been dissol$ed by the death of a partner# and before the affairs thereof ha$e been completely wound up# either by any sur$i$in& partner or by the representati$es of the deceased partner* +2- )his section does not apply to or in respect of an incorporated limited partnership* &. "uty of partner not to compete !ith firm +,- .f a partner# without the consent of the other partners# carries on any business of the same nature as and competin& with that of the firm# the partner must account for and pay o$er to the firm all profits made by the partner in that business* +1- )his section does not apply to or in respect of an incorporated limited partnership* &1 $ights of assignee of share in partnership +,- An assi&nment by any partner of the partner s share in the partnership# either absolute or by way of mort&a&e or redeemable char&e# does not# as a&ainst the other partners# entitle the assi&nee durin& the continuance of the partnership# to interfere in the mana&ement or administration of the partnership business or affairs# or to re7uire any account of the partnership transactions# or to inspect the partnership boo5s# but entitles the assi&nee only to recei$e the share of profits to which the assi&nin& partner would otherwise be entitled# and the assi&nee must accept the account of profits a&reed to by the partners* +1- .n case of a dissolution of the partnership# whether as respect all the partners# or as respects the assi&nin& partner# the assi&nee is entitled to recei$e the share of the partnership assets to which the assi&nin& partner is entitled as between the partner and the other partners# and for the purpose of ascertainin& that share# to an account as from the date of the dissolution* +2- )his section does not apply to or in respect of an incorporated limited partnership* "i#ision ' "issolution of partnership &1A "i#ision oes not apply to incorporate limite partnerships )his ;i$ision does not apply to or in respect of an incorporated limited partnership* &2 "issolution by e%piration or other!ise Sub"ect to any a&reement between the partners# a partnership is dissol$ed:

+a- .f entered into for a fixed term# by the expiration of that term: +b- .f entered into for a sin&le ad$enture or underta5in&# by the termination of that ad$enture or underta5in&: +c- .f entered into for an undefined time# by any partner &i$in& notice to the other or others of the partner s intention to dissol$e the partnership* .n the last8mentioned case the partnership is dissol$ed as from the date mentioned in the notice as the date of dissolution# or# if no date is mentioned# as from the date of the communication of the notice* && "issolution by ban4ruptcy3 eath3 or change +,- Sub"ect to any a&reement between the partners# e$ery partnership is dissol$ed as re&ards all the partners by the death or ban5ruptcy of any partner* +1- A partnership may# at the option of the other partners# be dissol$ed if any partner suffers the partner s share of the partnership property to be char&ed under this Act for the partner s separate debt* &' "issolution by illegality of partnership A partnership is in e$ery case dissol$ed by the happenin& of any e$ent which ma5es it unlawful for the business of the firm to be carried on# or for the members of the firm to carry it on in partnership* &) "issolution by the Court 9n application by a partner the 'ourt may order a dissolution of the partnership in any of the followin& cases: +a- When a partner has been declared in accordance with law to be of unsound mind and incapable of mana&in& the partner s affairs# or is shown to the satisfaction of the 'ourt to be of permanently unsound mind# in either of which cases the application may be made as well on behalf of that partner by the partner s committee or next friend or person ha$in& title to inter$ene as by any other partner* +b- When a partner# other than the partner suin&# becomes in any other way permanently incapable of performin& the partner s part of the partnership contract* +c- When a partner# other than the partner suin&# has been &uilty of such conduct as# in the opinion of the 'ourt# re&ard bein& had to the nature of the business# is calculated to pre"udicially affect the carryin& on of the business* +d- When a partner# other than the party suin&# wilfully or persistently commits a breach of the partnership a&reement# or otherwise conducts himself or herself in matters relatin& to the partnership business so that it is not reasonably practicable for the other partner or partners to carry on the business in partnership with the partner* +e- When the business of the partnership can only be carried on at a loss* +f- Whene$er in any case circumstances ha$e arisen# which# in the opinion of the 'ourt# render it "ust and e7uitable that the partnership be dissol$ed* &* $ights of persons ealing !ith firm against apparent members of firm +,- When a person deals with a firm after a chan&e in its constitution# the person is entitled to treat all apparent members of the old firm as still bein& members of the firm until the person has notice of the chan&e* +1- An ad$ertisement in the BaCette and in at least one newspaper circulatin& in Sydney and one newspaper circulatin& in the district in which the firm carries on business shall be notice as to persons who had not dealin&s with the firm before the date of the dissolution or chan&e so ad$ertised* +2- )he estate of a partner who dies# or who becomes ban5rupt# or of a partner who# not ha$in& been 5nown to the person dealin& with the firm to be a partner# retires from the

firm# is not liable for partnership debts contracted after the date of the death# ban5ruptcy# or retirement respecti$ely* &+ $ight of partners to notify issolution 9n the dissolution of a partnership or retirement of a partner any partner may publicly notify the same# and may re7uire the other partner or partners to concur for that purpose in all necessary and proper acts# if any# which cannot be done without the partner s or their concurrence* &8 Continuing authority of partners for purposes of !in ing5up After the dissolution of a partnership the authority of each partner to bind the firm# and the other ri&hts and obli&ations of the partners continue# notwithstandin& the dissolution# so far as may be necessary to wind up the affairs of the partnership# and to complete transactions be&un but unfinished at the time of the dissolution# but not otherwise: Pro$ided that the firm is in no case bound by the acts of a partner who has become ban5rupt6 but this pro$iso does not affect the liability of any person who has# after the ban5ruptcy# represented himself or herself or 5nowin&ly suffered himself or herself to be represented as a partner of the ban5rupt* &9 $ights of partners to application of partnership property 9n the dissolution of a partnership e$ery partner is entitled# as a&ainst the other partners in the firm# and all persons claimin& throu&h them in respect of their interests as partners# to ha$e the property of the partnership applied in payment of the debts and liabilities of the firm# and to ha$e the surplus assets after such payment applied in payment of what may be due to the partners respecti$ely after deductin& what may be due from them as partners to the firm6 and for that purpose any partner or the partner s representati$es may# on the termination of the partnership# apply to the 'ourt to wind up the business and affairs of the firm* '. Apportionment of premium !hen partnership prematurely issol#e Where one partner has paid a premium to another on enterin& into a partnership for a fixed term# and the partnership is dissol$ed before the expiration of that term otherwise than by the death of a partner# the 'ourt may order the repayment of the premium# or of such part as it thin5s "ust# ha$in& re&ard to the terms of the partnership contract# and to the len&th of time durin& which the partnership has continued6 unless: +a- the dissolution is# in the "ud&ment of the 'ourt# wholly or chiefly due to the misconduct of the partner who paid the premium# or +b- the partnership has been dissol$ed by an a&reement containin& no pro$ision for a return of any part of the premium* '1 $ights !here partnership issol#e for frau or misrepresentation Where a partnership contract is rescinded on the &round of the fraud or misrepresentation of one of the parties thereto# the party entitled to rescind is# without pre"udice to any other ri&ht# entitled: +a- to a lien on# or ri&ht of retention of# the surplus of the partnership assets# after satisfyin& the partnership liabilities# for any sum of money paid by the party for the purchase of a share in the partnership and for any capital contributed by the party# and is +b- to stand in the place of the creditors of the firm for any payments made by the party in respect of the partnership liabilities# and +c- to be indemnified by the person &uilty of the fraud or ma5in& the representation a&ainst all the debts and liabilities of the firm* '2 $ight of outgoing partner in certain cases to share profits ma e after issolution +,- Where any member of a firm has died# or otherwise ceased to be a partner# and the sur$i$in& and continuin& partners carry on the business of the firm with its capital or assets without any final settlement of accounts as between the firm and the out&oin&

partner# or the partner s estate# then# in the absence of any a&reement to the contrary# the out&oin& partner or the partner s estate is entitled# at the option of the partner or the partner s representati$es# to such share of the profits made since the dissolution as the 'ourt may find to be attributable to the use of the partner s share of the partnership assets# or to interest at the rate of six per centum per annum on the amount of the partner s share of the partnership assets* +1- Pro$ided that where# by the partnership contract# an option is &i$en to sur$i$in& or continuin& partners to purchase the interest of a deceased or out&oin& partner# and that option is duly exercised# the estate of the deceased partner# or the out&oin& partner or the partner s estate# as the case may be# is not entitled to any further or other share of profits6 but if any partner assumin& to act in exercise of the option does not in all material respects comply with the terms thereof# the partner is liable to account under the fore&oin& pro$isions of this section* '& $etiring or ecease partner1s share to be a ebt Sub"ect to any a&reement between the partners# the amount due from sur$i$in& or continuin& partners to an out&oin& partner# or the representati$es of a deceased partner# in respect of the out&oin& or deceased partner s share# is a debt accruin& at the date of the dissolution or death* '' $ule for istribution of assets on final settlement of accounts .n settlin& accounts between the partners after a dissolution of partnership# the followin& rules shall# sub"ect to any a&reement# be obser$ed: +a- %osses# includin& losses and deficiencies of capital# shall be paid first out of profits# next out of capital# and lastly# if necessary# by the partners indi$idually in the proportion in which they were entitled to share profits* +b- )he assets of the firm# includin& the sums# if any# contributed by the partners to ma5e up losses or deficiencies of capital# shall be applied in the followin& manner and order: , .n payin& the debts and liabilities of the firm to persons who are not partners therein* 1 .n payin& to each partner ratably what is due by the firm to the partner for ad$ances as distin&uished from capital* 2 .n payin& to each partner ratably what is due from the firm to the partner in respect of capital* / )he ultimate residue# if any# shall be di$ided amon& the partners in the proportion in which profits are di$isible* ') 6$epeale 7 "i#ision ) (iscellaneous pro#isions '* 8a#ing for rules of e9uity an common la! )he rules of e7uity and of common law applicable to partnership shall continue in force except so far as they are inconsistent with the express pro$isions of this Act*