Queensland: Partnership Act 1891 (Qld)

Partnership Act 1891 An Act to declare and amend the law of partnership Chapter 1 Preliminary Part 1 Citation 1 Short title This Act may be cited as the Partnership Act 1891. 2 Notes in text A note in the text of this Act is part of the Act. Part 2 Interpretation 3 Definitions The dictionary in the schedule defines particular words used in this Act. 4 Meaning of firm and firm-name (1) Persons who have entered into partnership with one another are for the purposes of this Act called collectively a firm, and the name under which their business is carried on is called the firm-name. (2) However, in relation to an incorporated limited partnership, the firm-name of the incorporated limited partnership is the name of the incorporated limited partnership recorded in the register. (3) In this Act, a reference, in relation to an incorporated limited partnership, to the incorporated limited partnership or the firm is a reference to the incorporated limited partnership as a separate legal entity and not to the partners in that partnership. 5 Meaning of partnership (1) Partnership is the relation which subsists between persons carrying on a business in common with a view of profit. (1A) Partnership includes an incorporated limited partnership. (2) However, the relation between members of any company or association that is— (a) incorporated under the Corporations Act; or (b) formed or incorporated by or in pursuance of any other Act of Parliament or letters patent, or Royal Charter; is not a partnership within the meaning of this Act. Part 3 Application 5A Application of laws of partnership to limited partnerships and incorporated limited partnerships (1) Chapter 2 applies to limited partnerships, subject to chapter 3. (2) Except as provided (whether expressly or by necessary implication) by this Act or any other Act, the law relating to partnership does not apply in relation to— (a) an incorporated limited partnership; or (b) the partners in an incorporated limited partnership; or (c) the relationship between an incorporated limited partnership and its partners. Chapter 2 Partnerships generally Part 1 Nature of partnership 6 Rules for deciding existence of partnership (1) In deciding whether a partnership does or does not exist, regard must be had to the following rules— (a) joint tenancy, tenancy in common, joint property, common property, or part ownership does not of itself create a partnership as to anything held or owned jointly or in common, whether the tenants or owners do or do not share any profits made by the use of anything held or owned jointly or in common; (b) the sharing of gross returns does not of itself create a partnership, whether the persons sharing such returns have or have not a joint or common right or interest in any property from which or from the use of which the returns are derived; (c) the receipt by a person of a share of the profits of a business is prima facie evidence that the person is a partner in the business, but the receipt of such a share, or of a payment contingent on or varying with the profits of a business, does not of itself make the person a partner in the business, and in particular— (i) the receipt by a person of a debt or other liquidated amount by instalments or otherwise out of the accruing profits of a business does not itself make the person a partner in the business or liable as such; (ii) a contract for the remuneration of a servant or agent of a person engaged in a business by a share of the profits of the business does not itself make the servant or agent a partner in the business or liable as such; (iii) a person being a deceased partner's child or spouse, and receiving 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; (iv) the advance of money by way of loan to a person engaged or about to engage in any business on a contract with that person that the lender is to receive a rate of interest varying with the profits, or is to receive a share of the profits arising from carrying on the business, does not of itself make the lender a partner with the person or persons carrying on the business or liable as such; (v) a person receiving by way of annuity or otherwise a portion of the profits of a business in consideration of the sale by the person of the goodwill of the business is not by reason only of such receipt a partner in the business or liable as such. Note— See section 82 for an additional rule applying to acts preparatory to the registration of incorporated limited partnerships. (2) A contract mentioned in subsection (1)(c)(iv) must be in writing and signed by or on behalf of all the parties to the contract. (3) This section does not apply in relation to an incorporated limited partnership. 7 Postponement of rights of person lending or selling in consideration of share of profits in case of insolvency In the event of any person to whom money has been advanced by way of loan upon such a contract as is mentioned in section 6, or of any buyer of a goodwill in consideration of a share of the profits of the business, being adjudicated insolvent, entering into an arrangement to pay the person's creditors less than 100 cents in the dollar, or dying in insolvent circumstances, the lender of the loan is not entitled to recover anything in relation to the person's loan, and the seller of the goodwill is not entitled to recover anything in relation to the share of profits contracted for, until the claims of the other creditors of the borrower or buyer for valuable consideration in money or money's worth have been satisfied. Part 2 Relations of partners to persons dealing with them 8 Power of partner to bind the firm (1) Every partner in a partnership, other than a firm that is a limited partnership or incorporated limited partnership, is an agent of the firm and his or her other partners for the purpose of the business of the partnership, and the acts of every partner who does any act for carrying on in the usual way of business of the kind carried on by the firm of which the partner is a member bind the firm and his or her partners, unless— (a) the partner so acting has in fact no authority to act for the firm in the particular matter; and (b) the person with whom the partner is dealing either knows that the partner has no authority, or does not know or believe the partner to be a partner. (2) Every general partner in a limited partnership or incorporated limited partnership is an agent of the partnership and of the other general partners for the purpose of the business of the partnership, and the acts of every general partner who does any act for carrying on in the usual way business of the kind carried on by the partnership of which the partner is a member bind the partnership and the other general partners unless— (a) the general partner so acting has in fact no authority to act for the partnership in the particular matter; and (b) the person with whom the general partner is dealing either knows that the general partner has no authority, or does not know or believe the general partner to be a general partner. 9 Partners bound by acts on behalf of firm (1) An act or instrument relating to the business of a firm, other than an incorporated limited partnership, and done or executed in the firm-name, or in any other manner showing an intention to bind the firm, by any person authorised to bind the firm, whether a partner or not, is binding on the firm and all the partners. (2) An act or instrument relating to the business of a firm that is an incorporated limited partnership, and done or executed in the firm-name, or in any other manner, showing an intention to bind the firm by any person authorised to bind the firm, whether a general partner or not, is (subject to section 12(3)) binding on the firm and all the general partners. (3) This section does not affect any general rule of law relating to the execution of deeds or negotiable instruments. 10 Partner using credit of firm for private purposes (1) If one partner pledges the credit of a firm, other than 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 partners. (2) If a general partner pledges 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 general partner is in fact specially authorised by the firm. (3) This section does not affect any personal liability incurred by an individual general partner. 11 Effect of notice that firm will not be bound by acts of partner (1) If it has been agreed between partners that any restriction is to be placed on the power of any 1 or more of them to bind a firm, other than a firm that is an incorporated limited partnership, no act done in contravention of the agreement is binding on the firm in relation to persons having notice of the agreement. (2) If it has been agreed 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 contravention of the agreement is binding on the firm in relation to persons having notice of the agreement. 12 Liability of partners (1) Every partner in a firm, other than an incorporated limited partnership, is liable jointly with the other partners for all debts and obligations of the firm incurred while a partner, and, if the partner is an individual, after the partner's death the partner's estate is also severally liable in a due course of administration for those debts and obligations, so far as they remain unsatisfied, but subject to the prior payment of the partner's separate debts. (2) Every general partner in an incorporated limited partnership is liable jointly with the incorporated limited partnership for all debts and obligations of the partnership incurred while the general partner is a general partner, and, if the general partner is an individual, after the general partner's death the general partner's estate is also severally liable in a due course of administration for those debts or obligations so far as they remain unsatisfied but subject to the prior payment of the partner's separate debts. (3) Despite subsection (2), a general partner in an incorporated limited partnership is only liable for any debts or obligations of the incorporated limited partnership— (a) to the extent the incorporated limited partnership is unable to satisfy the debts and obligations; or (b) to a greater extent provided by the partnership agreement. 13 Liability of the firm for wrongs (1) Subject to subsection (2), if, by any wrongful act or omission of any partner in a firm, other than an incorporated limited partnership, acting in the ordinary course of the business of the firm, or with the authority of his or her copartners, loss or injury is caused to any person not being a partner in the firm, or any penalty is incurred, the firm is liable for the loss, injury or penalty to the same extent as the partner so acting or omitting to act. (2) For subsection (1), a partner in a firm, other than an incorporated limited partnership, who commits a wrongful act or omission as a director of a body corporate under the Corporations Act is not to be taken to be acting in the ordinary course of the business of the firm or with the authority of the partner's copartners only because of any 1 or more of the following— (a) the partner obtained the agreement or authority of the partner's copartners, or some of them, to be appointed or to act as a director of the body corporate; (b) remuneration that the partner receives for acting as a director of the body corporate forms part of the income of the firm; (c) any copartner is also a director of that or any other body corporate. (3) Subject to subsection (4), if by any wrongful act or omission of any general partner in an incorporated limited partnership acting in the ordinary course of the business of the incorporated limited partnership, or with its authority, loss or injury is caused to any person not being a partner in the incorporated limited partnership, or any penalty is incurred, the incorporated limited partnership is liable for the loss or injury or penalty to the same extent as the general partner so acting or omitting to act. Note— See section 12(2) about joint liability of general partners and the incorporated limited partnership. (4) For subsection (3), a general partner in an incorporated limited partnership who commits a wrongful act or omission as a director of a body corporate under the Corporations Act is not to be taken to be acting in the ordinary course of business of the incorporated limited partnership or with its authority only because of any 1 or more of the following— (a) the general partner obtained the agreement or authority of the incorporated limited partnership to be appointed or to act as a director of the body corporate; (b) remuneration that the general partner receives for acting as a director of the body corporate forms part of the income of the incorporated limited partnership; (c) any other general partner in the incorporated limited partnership is also a director of that or any other body corporate. 14 Misapplication of money or property received for or in custody of the firm (1) In each of the following cases involving the partners of a firm, other than an incorporated limited partnership, the firm is liable to make good the loss mentioned in the case— (a) 1 partner acting within the scope of the partner's apparent authority receives the money or property of a third person and misapplies it; (b) a firm in the course of its business receives money or property of a third person, and the money or property so received is misapplied by 1 or more of the partners while it is in the custody of the firm. (2) In each of the following cases involving general partners in an incorporated limited partnership, the incorporated limited partnership is liable to make good the loss mentioned in the case— (a) 1 general partner acting within the scope of the general partner's apparent authority receives the money or property of a third person and misapplies it; (b) an incorporated limited partnership in the course of its business receives money or property of a third person, and the money or property so received is misapplied by 1 or more of the general partners while it is in the custody of the incorporated limited partnership. 15 Liability for wrongs joint and several (1) Every partner in a firm, other than an incorporated limited partnership, is liable jointly with the partner's copartners and also severally for everything for which the firm, while he or she is a partner in the firm, becomes liable under either section 13 or 14. (2) Every general partner in an incorporated limited partnership is liable jointly with the other general partners in the incorporated limited partnership and also severally for everything for which the incorporated limited partnership, while the general partner is a general partner in the incorporated limited partnership, becomes liable under section 13(3) or 14(2). (3) Despite subsection (2), a general partner in an incorporated limited partnership is only liable for any liability of the incorporated limited partnership referred to in the subsection— (a) to the extent the incorporated limited partnership is unable to satisfy the liability; or (b) to a greater extent provided by the partnership agreement. 16 Improper employment of trust property for partnership purposes (1) If a partner in a firm, other than an incorporated limited partnership, being a trustee, improperly employs trust property in the business or on the account of the partnership, no other partner is liable for the trust property to the persons beneficially interested in it. (2) However— (a) subsection (1) does not affect any liability incurred by any partner by reason of the partner's having notice of a breach of trust; and (b) nothing in subsection (1) prevents trust money from being followed and recovered from the firm if still in its possession or under its control. (3) If a general partner in an incorporated limited partnership, being a trustee, improperly employs trust property in the business or on the account of the partnership, neither the partnership nor any other partner is liable for the trust property to the persons beneficially interested in it. (4) However— (a) subsection (3) does not affect any liability incurred by any partner in the incorporated limited partnership by reason of the partner's having notice of a breach of trust; and (b) nothing in subsection (3) prevents trust money from being followed and recovered from the incorporated limited partnership if still in its possession or under its control. 17 Persons liable by 'holding out' (1) Everyone who by words spoken or written or by conduct represents himself or herself, or who knowingly 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 the representation given credit to the firm, whether the representation has or has not been made or communicated to the person so giving credit by or with the knowledge of the apparent partner making the representation or suffering it to be made. (2) Everyone who by words spoken or written or by conduct represents himself or herself, or who knowingly suffers himself or herself to be represented, as a general partner in a particular firm that is a limited partnership or an incorporated limited partnership is liable as a general partner to anyone who has on the faith of the representation given credit to the firm, whether the representation has or has not been made or communicated to the person so giving credit by or with the knowledge of the apparent general partner making the representation or suffering it to be made. (3) If after a partner's death the partnership business is continued in the old firm-name, the continued use of that name or of the deceased partner's name as part of that name does not of itself make the deceased partner's executors or administrators estate or effects liable under subsection (1) or (2) for any partnership debts contracted after the partner's death. 18 Admissions and representations of partners (1) An admission or representation made by any partner in a firm other than a limited partnership or incorporated limited partnership concerning the partnership affairs, and in the ordinary course of its business, is evidence against the firm. (2) An admission or representation made by any general partner in a limited partnership or incorporated limited partnership concerning the partnership affairs, and in the ordinary course of its business, is evidence against the firm. 19 Notice to acting partner to be notice to the firm (1) Notice 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 relating 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. (2) Notice to any general partner in a limited partnership or incorporated limited partnership who habitually acts in the partnership business of any matter relating 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. 20 Liabilities of incoming and outgoing partners (1) A person who is admitted as a partner into an existing firm, other than a limited partnership or incorporated limited partnership, does not by that admission alone become liable for anything done before the person became a partner. (2) A person who is admitted as a general partner into an existing limited partnership or incorporated limited partnership does not by that admission alone become liable for anything done before the person became a general partner. (3) 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 obligations incurred before the partner's retirement. (4) 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. (5) A retiring partner in a firm, other than a limited partnership or incorporated limited partnership, may be discharged from any existing liabilities by an agreement to that effect between the partner and the members of the firm as newly constituted and the creditors, and this agreement may be either expressed or inferred as a fact from the course of dealing between the creditors and the firm as newly constituted. (6) A retiring partner in a limited partnership or incorporated limited partnership may be discharged from any existing liabilities by an agreement to that effect between the partner and the firm and the creditors, and this agreement may be either expressed or inferred as a fact from the course of dealing between the creditors and the firm. 21 Revocation of continuing guaranty by change in firm (1) A continuing guaranty given either to a firm or to a third person in relation to the transactions of a firm is, in the absence of agreement to the contrary, revoked as to future transactions by any change in the constitution of the firm to which, or of the firm in relation to the transactions of which, the guaranty was given. (2) This section does not apply in relation to an incorporated limited partnership. Part 3 Relations of partners to one another 22 Variation by consent of terms of partnership The mutual rights and duties of partners, whether ascertained by agreement or defined by this Act, may be varied by the consent of all the partners, and that consent may be either express or inferred from a course of dealing. 23 Partnership property of firms other than incorporated limited partnerships (1) All property and rights and interests in property originally brought into the partnership stock or acquired, whether by purchase or otherwise, on account of the firm, or for the purposes and in the course of the partnership business (partnership property) must be held and applied by the partners exclusively for the purposes of the partnership and in accordance with the partnership agreement. (2) However, the legal estate or interest in any land which belongs to the partnership is to devolve according to the nature and tenure of the estate or interest, and the general rules of law applying to the estate or interest, but in trust, so far as necessary, for the persons beneficially interested in the land under this section. (3) If co-owners of an estate or interest in any land not being itself partnership property are partners as to profits made by the use of that land, and purchase other land out of the profits to be used in like manner, the land so purchased belongs to them, in the absence of an agreement to the contrary, not as partners, but as co-owners for the same respective estates and interests as are held by them in the land first mentioned at the date of the purchase. (4) This section does not apply in relation to an incorporated limited partnership. 23A Partnership property of incorporated limited partnership (1) All property, and rights and interests in property, acquired, 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 exclusively for the purposes of the partnership. (2) No partner in an incorporated limited partnership, only because of being a partner in the partnership, has any legal or beneficial interest in its partnership property. 24 Property bought with partnership money Unless the contrary intention appears, property bought with money belonging to the firm is deemed to have been bought on account of the firm. 25 Conversion into personal estate of land held as partnership property (1) If land has become partnership property, unless the contrary intention appears, it is to be treated as between the partners (including the representatives of a deceased partner), and also as between the representatives of a deceased partner, as personal and not real estate. (2) This section does not apply in relation to an incorporated limited partnership. 26 Procedure against partnership property for a partner's separate judgment debt (1) An enforcement warrant can not issue against any partnership property except on a judgment against the firm. (2) The court may, on the application of any judgment creditor of a partner, make an order charging that partner's interest in the partnership property and profits with payment of the amount of the judgment debt and interest on the judgment debt, and may by the same or a subsequent order appoint a receiver of that partner's share of profits (whether already declared or accruing), and of any other money which may be coming to the partner in relation to the partnership, and direct all accounts and inquiries, and give all other orders and directions which might have been directed or given if the charge had been made in favour of the judgment creditor by the partner, or which the circumstances of the case may require. (3) The other partner or partners are at liberty at any time to redeem the interest charged, or in case of a sale being directed, to purchase the same. (4) Subsections (2) and (3) do not apply in relation to an incorporated limited partnership. 27 Rules as to interests and duties of partners subject to special agreement (1) The interests of partners in the partnership property and their rights and duties in relation to the partnership must be decided, subject to any agreement express or implied between the partners, by the following rules— (a) all the partners are entitled to share equally in the capital and profits of the business, and must contribute equally towards the losses whether of capital or otherwise sustained by the firm; (b) the firm must indemnify every partner in relation to payments made and personal liabilities incurred by the partner— (i) in the ordinary and proper conduct of the business of the firm; or (ii) in or about anything necessarily done for the preservation of the business or property of the firm; (c) a partner making for the purpose of the partnership, any actual payment or advance beyond the amount of capital which the partner has agreed to subscribe, is entitled to interest at the rate of 6% per annum from the date of the payment or advance; (d) a partner is not entitled, before the ascertainment of profits, to interest on the capital subscribed by the partner; (e) every partner may take part in the management of the partnership business; (f) no partner is entitled to remuneration for acting in the partnership business; (g) no person may be introduced as a partner without the consent of all existing partners; (h) any difference arising as to ordinary matters connected with the partnership business may be decided by a majority of the partners, but no change may be made in the nature of the partnership business without the consent of all existing partners; (i) the partnership books are to be kept at the place of business of the partnership (or the principal place, if there is more than 1), and every partner may, if the partner thinks fit, have access to and inspect and copy any of them. (2) This section does not apply in relation to an incorporated limited partnership. 28 Expulsion of partner A majority of the partners can not expel a partner unless a power to do so has been conferred by express agreement between the partners. 29 Retirement from partnership at will (1) If no fixed term has been agreed upon for the duration of the partnership, any partner may determine the partnership at any time on giving notice of the partner's intention so to do to all the other partners. (2) If the partnership has originally been constituted by deed, a notice in writing, signed by the partner giving it, is sufficient for this purpose. (3) This section does not apply in relation to an incorporated limited partnership. 30 If partnership for term is continued over, continuance on old terms presumed (1) If a partnership entered into for a fixed term is continued after the term has expired, and without any express new agreement, the rights 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. (2) A continuance of the business by the partners or those of them who habitually acted in the business during the term, without any settlement or liquidation of the partnership affairs, is presumed to be a continuance of the partnership. (3) This section does not apply in relation to an incorporated limited partnership. 31 Duty of partners to render accounts etc. (1) Partners in a firm, other than an incorporated limited partnership, are bound to render true accounts and full information of all things affecting the partnership to any partner or his or her legal representatives. (2) An incorporated limited partnership is, subject to the partnership agreement, bound to render true accounts and full information of all things affecting the partnership to any partner or the partner's legal representatives. 32 Accountability of partners for private profits (1) Every partner must account to the firm for any benefit derived by the partner without the consent of the other partners from any transaction concerning the partnership, or from any use by the partner of the partnership property name or business connection. (2) This section applies also to transactions undertaken after a partnership has been dissolved by the death of a partner, and before the affairs of the partnership have been completely wound up, either by any surviving partner or by the representatives of the deceased partner. (3) This section does not apply in relation to an incorporated limited partnership. 33 Duty of partner not to compete with firm (1) If a partner, without the consent of the other partners, carries on any business of the same nature as and competing with that of the firm, the partner must account for and pay over to the firm all profits made by him or her in that business. (2) This section does not apply in relation to an incorporated limited partnership. 34 Rights of assignee of share in partnership (1) An assignment by any partner of his or her share in the partnership, either absolute or by way of mortgage or redeemable charge, does not, as against the other partners, entitle the assignee, during the continuance of the partnership, to interfere in the management or administration of the partnership business or affairs, or to require any accounts of the partnership transactions, or to inspect the partnership books, but entitles the assignee only to receive the share of profits to which the assigning partner would otherwise be entitled, and the assignee must, except in case of fraud, accept the account of profits agreed to by the partners. (2) In case of a dissolution of the partnership, whether in relation to all the partners or in relation to the assigning partner, the assignee is entitled to receive the share of the partnership assets to which the assigning partner is entitled as between the assigning partner and the other partners, and, for the purpose of ascertaining that share, to an account as from the date of the dissolution. (3) This section does not apply in relation to an incorporated limited partnership. Part 4 Dissolution of partnership and its consequences 34A Part does not apply to incorporated limited partnerships This part does not apply in relation to an incorporated limited partnership. 35 Dissolution by expiration or notice (1) Subject to any agreement between the partners, a partnership is dissolved— (a) if entered into for a fixed term—by the expiration of that term; (b) if entered into for a single adventure or undertaking—by the termination of that adventure or undertaking; (c) if entered into for an undefined time—by any partner giving notice to the other or others of the partner's intention to dissolve the partnership. (2) In the last mentioned case the partnership is dissolved as from the date mentioned in the notice as the date of dissolution, or, if no date is so mentioned, as from the date of the communication of the notice. 36 Dissolution by insolvency, death, or charge (1) Subject to any agreement between the partners, every partnership is dissolved as regards all the partners by the death or insolvency of any partner. (2) A partnership may, at the option of the other partners, be dissolved if any partner suffers his or her share of the partnership property to be charged under this Act for the partner's separate debt. 37 Dissolution by illegality of partnership A partnership is in every case dissolved by the happening of any event which makes 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. 38 Dissolution by the court On application by a partner the court may decree a dissolution of the partnership in any of the following cases— (a) if a partner is shown to the satisfaction of the court to be of permanently unsound mind, in which case the application may be made as well on behalf of that partner by his or her committee or next friend or person having title to intervene as by any other partner; (b) if a partner, other than the partner suing, becomes in any other way permanently incapable of performing his or her part of the partnership contract; (c) if a partner, other than the partner suing, has been guilty of conduct that, in the opinion of the court, regard being had to the nature of the business, is calculated to prejudicially affect the carrying on of the business; (d) if a partner, other than the partner suing, wilfully or persistently commits a breach of the partnership agreement, or otherwise so conducts himself or herself in matters relating to the partnership business that it is not reasonably practicable for the other partner or partners to carry on the business in partnership with the partner; (e) if the business of the partnership can only be carried on at a loss; (f) if in any case circumstances have arisen which, in the opinion of the court, render it just and equitable that the partnership be dissolved. 39 Rights of persons dealing with firm against apparent members of firm (1) If a person deals with a firm after a change in its constitution the person is entitled to treat all apparent members of the old firm as still being members of the firm until the person has notice of the change. (2) An advertisement in the gazette is notice to persons who have not had dealings with the firm before the date of the dissolution or change so advertised. (3) The estate of a partner who dies or who becomes insolvent, or of a partner who, not having been known to the person dealing with the firm to be a partner, retires from the firm, is not liable for partnership debts contracted after the date of the death, insolvency, or retirement respectively. 40 Right of partners to notify dissolution On the dissolution of a partnership or retirement of a partner any partner may publicly notify the same, and may require the other partner or partners to concur for that purpose in all necessary or proper acts (if any) which can not be done without his, her or their concurrence. 41 Continuing authority of partners for purposes of winding up (1) After the dissolution of a partnership the authority of each partner to bind the firm, and the other rights and obligations of the partners, continue notwithstanding the dissolution so far as may be necessary to wind up the affairs of the partnership, and to complete transactions begun but unfinished at the time of the dissolution, but not otherwise. (2) However, the firm is in no case bound by the acts of a partner who has become insolvent, but this subsection does not affect the liability of any person who has after the insolvency represented himself or herself or knowingly suffered himself or herself to be represented as a partner of the insolvent. 42 Rights of partners as to application of partnership property On the dissolution of a partnership every partner is entitled, as against the other partners in the firm, and all persons claiming through them in relation to their interests as partners, to have the property of the partnership applied in payment of the debts and liabilities of the firm, and to have the surplus assets after that payment applied in payment of what may be due to the partners respectively after deducting what may be due from them as partners to the firm, and for that purpose any partner or his or her representatives may on the termination of the partnership apply to the court to wind up the business and affairs of the firm. 43 Apportionment of premium if partnership prematurely dissolved If one partner has paid a premium to another on entering into a partnership for a fixed term, and the partnership is dissolved before the expiration of that term otherwise than by the death of a partner, the court may order that repayment of the premium, or of such part of the premium as it thinks just, having regard to the terms of the partnership contract and to the length of time during which the partnership has continued, unless— (a) the dissolution is, in the judgment of the court, wholly or chiefly due to the misconduct of the partner who paid the premium; or (b) the partnership has been dissolved by an agreement containing no provision for a return of any part of the premium. 44 Rights if partnership dissolved for fraud or misrepresentation If a partnership contract is rescinded on the ground of the fraud or misrepresentation of one of the parties to the partnership contract, the party entitled to rescind is, without prejudice to any other right, entitled— (a) to a lien on, or right of retention of, the surplus of the partnership assets, after satisfying 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 (b) to stand in the place of the creditors of the firm for any payments made by the party in relation to the partnership liabilities; and (c) to be indemnified by the person guilty of the fraud or making the representation against all the debts and liabilities of the firm. 45 Right of outgoing partner in certain cases to share profits made after dissolution (1) If any member of a firm has died or otherwise ceased to be a partner, and the surviving or continuing 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 outgoing partner or the partner's estate, then, in the absence of any agreement to the contrary, the outgoing partner or the partner's estate is entitled at the option of the partner or the partner's representatives to such share of the profits made since the dissolution as the court may find to be attributable to the use of the partner's share of the partnership assets, or to interest at the rate of 5% per annum on the amount of the partner's share of the partnership assets. (2) However, if by the partnership contract an option is given to surviving or continuing partners to purchase the interest of a deceased or outgoing partner, and that option is duly exercised, the estate of the deceased partner, or the outgoing partner or the partner's estate, as the case may be, is not entitled to any further or other share of profits, but if any partner assuming to act in exercise of the option does not in all material respects comply with the terms of the option, the partner is liable to account under subsection (1). 46 Retiring or deceased partner's share to be a debt Subject to any agreement between the partners, the amount due from surviving or continuing partners to an outgoing partner or the representatives of a deceased partner in relation to the outgoing or deceased partner's share is a debt accruing at the date of the dissolution or death. 47 Rule for distribution of assets on final settlement of accounts In settling accounts between the partners after a dissolution of partnership, the following rules are, subject to any agreement, to be observed— (a) losses, including losses and deficiencies of capital, are to be paid first out of profits, next out of capital, and lastly, if necessary, by the partners individually in the proportion in which they were entitled to share profits; (b) the assets of the firm including the sums (if any) contributed by the partners to make up losses or deficiencies of capital, are to be applied in the following manner and order— (i) in paying the debts and liabilities of the firm to persons who are not partners in the firm; (ii) in paying to each partner rateably what is due from the firm to each partner for advances as distinguished from capital; (iii) in paying to each partner rateably what is due from the firm to each partner in relation to capital; (iv) the ultimate residue (if any) is to be divided among the partners in the proportion in which profits are divisible. Chapter 3 Limited partnerships Part 1 Preliminary 48 Definitions for ch 3 In this chapter— departure, in relation to a partner, means death, dissolution of a corporate person, insolvency or retirement. insolvency means bankruptcy in relation to a partner who is an individual and an equivalent condition in relation to a partner who is a corporate person. register means the register kept by the chief executive under section 51. Part 2 Formation and maintenance of limited partnerships 49 What is a limited partnership (1) A limited partnership is a partnership, other than an incorporated limited partnership— (a) that exists between 2 or more persons of whom 1 or more is or are a general partner or general partners and 1 or more is or are a limited partner or limited partners; and (b) that is formed under this chapter. (2) A corporate person may be a general partner or a limited partner in a limited partnership. 50 How formed (1) A limited partnership is formed upon registration in the office of the chief executive of a statement in the approved form signed by each person who is to be a partner in the partnership and payment to the chief executive of the prescribed fee. (2) A statement referred to in subsection (1) must contain the following particulars— (a) the firm-name; (b) the full address in Queensland of the registered office of the firm; (c) the full name and address of each partner; (d) a statement that the partnership is to be a limited partnership; (e) a statement in relation to each limited partner to the effect that he or she is a limited partner whose liability to contribute is limited to the extent of an amount of money stated in the statement; (f) any other particulars prescribed by regulation. (3) A reference in subsection (2) to the address of a partner means— (a) in the case of an individual—the individual's principal place of residence; (b) in the case of a corporate person—its registered office or principal place of business. 51 Register—proof of registration (1) The chief executive must keep a register of all limited partnerships. (2) The register may be kept in any form the chief executive considers appropriate that allows it to be inspected at an office of a department at Brisbane during normal office hours. (3) The chief executive must, upon registration of a statement referred to in section 50, and may, afterwards, issue a certificate in the approved form as to the formation and composition at any time of the limited partnership to which the statement relates. (4) A certificate issued under subsection (3)— (a) is conclusive evidence that the limited partnership to which it refers was formed on the date of registration referred to in the certificate; and (b) is evidence and, in the absence of evidence to the contrary, conclusive evidence that the partnership to which it refers consists or consisted of the general partners and limited partners named in the certificate as general partners or limited partners. 52 Registration of changes in limited partnership (1) Upon receipt by the chief executive of a notice of change in the approved form and payment of the prescribed fee the chief executive must record in the register for the limited partnership concerned a change— (a) in the firm-name; or (b) in the registered office of the firm; or (c) consisting in the departure from or admission to the partnership of a partner; or (d) in the name or address of a partner in the partnership; or (e) in the liability of a partner because of his or her becoming a limited partner instead of a general partner or a general partner instead of a limited partner or because of an alteration in the amount that the partner is liable to contribute as a limited partner; or (f) in any particular referred to in section 50(2)(f). (2) If a result of a change notified to the chief executive would be that the partnership concerned would be so constituted as not to be capable of being a limited partnership, the chief executive must not record the change in the register, despite subsection (1). (3) A notice referred to in subsection (1) must be signed and given— (a) by or on behalf of all those who are or will be partners in the partnership after the change takes effect, if the change involves the departure or admission of a partner or the alteration of the extent to which a partner is liable to contribute; or (b) by or on behalf of all the general partners in the partnership at the time the change takes effect, in any case other than one referred to in paragraph (a). (4) A notice under subsection (1) that relates to the admission of a limited partner to the partnership must contain a statement to the effect that the person admitted is a limited partner whose liability to contribute is limited to the extent of an amount of money stated in the statement. (5) Despite the happening of any change in relation to a limited partnership that the chief executive may record in the register (upon notice of the change) under subsection (1)— (a) this Act continues to apply to the partnership as a limited partnership; and (b) a continuing partner shown on the register as a limited partner continues to be a limited partner as so registered. (6) If a change of which notice may be given under subsection (1) involves the admission of a limited partner to a partnership or an alteration to the extent to which a partner in the partnership is liable to contribute, being a change arising from agreement between the partners, the change can not take effect until notice of the change has been given under subsection (1) to the chief executive and the chief executive has recorded the change in the register. (7) Despite the departure of a person as a partner from a limited partnership the partner and the partner's estate are liable as if that departure had not happened for liabilities incurred by the partnership after the partner's departure unless and until notice of the departure has been given to the chief executive under subsection (1) for recording in the register. (7A) Subsection (7) does not apply in relation to liabilities incurred in dealings with a person who has notice of the departure. (8) Subject to the terms of any agreement between the partners in a limited partnership, the general partners in the partnership are authorised to give any notice under this section on behalf of all the partners. Part 3 Modification of general law of partnership 53 Liability of limited partner (1) A limited partner in a limited partnership is liable to contribute towards the liabilities of the firm but so as not to exceed the amount shown in relation to that limited partner in the register as the extent to which that limited partner is liable to contribute or the part of that amount that remains unpaid. (2) Subject to subsection (1), the liability of a limited partner in a limited partnership to contribute is that of a partner in a partnership that is not a limited partnership. 54 Liability for limited partnerships formed under corresponding laws (1) In this section— corresponding law means a law of another State, a Territory or a foreign country that is declared by regulation to be a corresponding law for the purposes of this chapter. limited partner, in a recognised limited partnership, means a partner in the partnership whose liability is limited under the corresponding law applying to the partnership. recognised limited partnership means a partnership formed under a corresponding law. (2) A limitation under a corresponding law on the liability of a limited partner in a recognised limited partnership extends to any liability incurred in connection with the conduct of the partnership's business in this State. (3) The law of another State or a Territory may be declared to be a corresponding law only if the Governor in Council is satisfied— (a) that the law is similar to this chapter; and (b) that under the law the limitation of liability of limited partners in a limited partnership formed under this chapter extends to any liability incurred in connection with the conduct of the partnership's business in the State or Territory. (4) The law of a foreign country may be declared to be a corresponding law only if the Governor in Council is satisfied that the law provides for the limitation of liability for partners or certain partners in certain partnerships. 55 Provisions concerning limited partner's contribution (1) Any contribution made by a limited partner in a limited partnership towards the discharge of liabilities of the firm must be in the form of money only. (1A) Any contribution made by a limited partner in a limited partnership towards the discharge of liabilities of the firm made otherwise than in money must not be taken to reduce the limited partner's liability under section 53(1). (2) If a limited partner in a limited partnership has paid contribution, whether or not towards the discharge of liabilities of the firm, and has drawn out or received back any part of the amount of the contribution, the amount so drawn out or received must be treated as part of the amount referred to in section 53(1) remaining unpaid. 56 Use of descriptive words in name (1) Every business document issued on behalf of a limited partnership in connection with the conduct of its business must bear in legible characters— (a) the firm-name shown in relation to the partnership in the register kept by the chief executive under section 51; and (b) immediately adjacent to the firm-name, the words 'a limited partnership'. (2) In subsection (1)— business document means any letter, notice, publication, offer, contract, order for goods or services, invoice, bill of exchange, promissory note, cheque, negotiable instrument, endorsement, letter of credit, receipt or statement of account. 57 Liability for contravention of s 56 (1) A person who issues a document to which section 56 applies that does not bear the name and words required by the section commits an offence against this Act. Maximum penalty—20 penalty units. (2) A partner in a limited partnership who acquiesces in the issue of a document to which section 56 applies knowing that the document does not bear the name and words required by the section is to be taken to have issued the document. (3) If a document to which section 56 applies issued in contravention of the section bears on its face any indication that it has been approved by or issued under the authority of any person, that person is to be taken to have issued the document unless the contrary is proved. 58 Recovery of loss because breach of s 56 If any person suffers loss because a document to which section 56 applies issued on behalf of a limited partnership did not bear the name or the words required by the section, the limited partnership and every person who committed an offence defined in section 57(1) in relation to the document are jointly and severally liable to recompense that first person for the loss suffered, which recompense may be recovered by action in the court as for a debt due and owing. 59 Registered office (1) A limited partnership must keep in Queensland at the place shown in the register as the address of the registered office of the partnership an office to which all communications with the firm may be addressed. (2) In the event of default in complying with subsection (1), each general partner in the limited partnership concerned commits an offence against this Act. Maximum penalty for subsection (2)—20 penalty units. 60 Incidents of limited partnerships (1) A limited partner in a limited partnership— (a) must not take part in the management of the business of the partnership; and (b) has no power to bind the firm. (2) However, the limited partner may, personally or by an agent, at any time inspect the books of the firm and examine the state and prospects of the business of the partnership, and may advise and consult with the other partners on those matters. (3) A limited partner must not be regarded as taking part in the management of the business of the limited partnership only because the limited partner— (a) is an employee or an independent contractor of the partnership or of a general partner; or (b) is an officer of a general partner that is a corporation; or (c) gives advice to, or for, the limited partnership or a general partner— (i) as part of the proper exercise of the functions arising from the engagement of the limited partner in a professional capacity; or (ii) arising from business dealings between the limited partner and the partnership or a general partner; or (d) gives a guarantee or indemnity for a debt or obligation of the partnership or of a general partner; or (e) participates in an action by the limited partners to enforce the rights, or safeguard the interests, of the limited partners; or (f) if authorised by the partnership agreement, participates in a general meeting of all the partners; or (g) exercises a right mentioned in subsection (2). (4) If a limited partner takes part in the management of the business of the limited partnership in breach of subsection (1), the limited partner is liable for all liabilities of the firm incurred while the limited partner does so as if the limited partner were a general partner. (5) Subject to the terms of any agreement between the partners in a limited partnership— (a) a difference arising as to ordinary matters connected with the firm's business may be decided by a majority of the general partners; and (b) a limited partner may, with the consent of the general partners, assign the limited partner's share in the partnership and upon the recording of the assignment in the register kept by the chief executive under section 51 the assignee is to be a limited partner in the assignor's place with all the rights of the assignor; and (c) a person may be admitted as a partner in the partnership without the consent of any limited partner. Part 4 Dissolution and cessation of limited partnerships 61 Dissolution not available in certain cases (1) Subject to the terms of any agreement between the partners in a limited partnership— (a) a limited partner is not entitled to dissolve the partnership by notice; and (b) the general partners or the other limited partners are not entitled to dissolve the partnership because a limited partner has suffered the limited partner's share of the partnership property to be charged for the limited partner's separate debt; and (c) the departure of a limited partner does not dissolve the partnership. (2) The fact that a limited partner in a limited partnership is of permanently unsound mind is not a ground for dissolution of the partnership by the court unless the share and interest of the partner in the partnership can not be otherwise ascertained or realised. 62 Cessation of limited partnerships A partnership is to cease to be a limited partnership if the partners agree that they are to carry on the business of the firm otherwise than as a limited partnership. 63 Registration of dissolution or cessation of limited partnerships (1) Upon receipt by the chief executive of a notice in the approved form— (a) of dissolution of a partnership registered as a limited partnership; or (b) of cessation of a limited partnership under section 62; and, upon payment of the prescribed fee, the chief executive must record in the register the fact of the dissolution or cessation effective on a date stated in the register in that behalf. (2) The date to be stated in the register under subsection (1) must be the date shown in the notice to the chief executive as the date on which the dissolution or cessation took effect or is to take effect or, if no date is shown, the date on which the record is made in the register under subsection (1). 64 Winding up by general partners If the affairs of a limited partnership are to be wound up by the partners with a view to its dissolution, the winding up must be carried out by the general partners unless the court otherwise orders. Part 5 Miscellaneous provisions 65 Legal proceedings Action by way of execution under or enforcement of a judgment obtained in an action against a limited partnership sued in its firm-name must not be taken against the property or person of a limited partner in the partnership except with the prior leave of the Supreme Court. 66 Duty to notify chief executive of changes (1) In the event of— (a) a change in the firm-name of a limited partnership; or (b) a change in the name or address of a partner in a limited partnership; or (c) a change that renders false or misleading any particular referred to in section 50(2)(f) shown in the register in relation to a limited partnership; or (d) a departure of a partner from or an admission of a partner to a limited partnership; or (e) dissolution of a partnership registered as a limited partnership; or (f) cessation of a limited partnership under section 62; each of the general partners at the time the event happens commits an offence against this Act if notice of the event is not given in the approved form to the chief executive under section 52 or 63 before the expiration of 7 days from the happening of the event. (2) An offence against subsection (1) is to be taken to continue until the notice in question is given to the chief executive. (3) Proceedings for a continuing offence under this section may be taken from time to time. (4) A matter of complaint for a continuing offence under this section may be for 1 day or more than 1 day of its happening. (5) A person who commits an offence against subsection (1) is liable— (a) for the failure to give the notice in question before the expiration of the 7 days from the happening of the event of which notice is required—to a maximum penalty of 20 penalty units; and (b) for each day during which the offence continues—to a maximum penalty of 1 penalty unit. (6) If a corporate person commits an offence against subsection (1), each director or member of the governing body of the corporate person is to be taken also to have committed the offence and is liable to be proceeded against and punished accordingly. 67 Chief executive may accept and record notices given by person registered as a partner Upon receipt by the chief executive of a notice in writing given by a person shown on the register as a partner in a limited partnership of the happening of an event affecting the partnership, in relation to which event the chief executive may amend the register upon notice given to the chief executive under section 52 or 63, the chief executive must record in the register that the notice has been received and the tenor of the notice. 68 Chief executive's power to cancel limited partnership's registration (1) This section applies if the chief executive reasonably believes that a limited partnership has ceased to exist because the partnership's business is not being carried on in the State under the partnership's firm-name, or by the partners, stated in the register. (2) The chief executive may, by written notice given to the person registered as the partnership's general partner and to the partnership at its registered office stated in the register— (a) ask whether the partnership still exists; and (b) ask for documentary proof of its existence or non-existence. (3) The notice must state that the chief executive may cancel the partnership's registration unless the chief executive is satisfied, within 1 month after the date of the notice, that the partnership still exists. (4) The chief executive must also, by public notice, notify the chief executive's intention to cancel the registration unless the chief executive is satisfied, by the day that is 1 month after the date of the notice mentioned in subsection (2), that the limited partnership still exists. (5) If the chief executive is not satisfied within 1 month after the date of the notice mentioned in subsection (2) that the partnership still exists, the chief executive may cancel the registration. (6) If the chief executive cancels the registration, the chief executive must give written notice of the cancellation—