Tasmania: Partnership Act 1891 (Tas)

Partnership Act 1891 An Act to declare and amend the law of partnership [Royal Assent 13 August 1891] Be it enacted by His Excellency the Governor of Tasmania, by and with the advice and consent of the Legislative Council and House of Assembly, in Parliament assembled, as follows: PART 1 - Preliminary 1. Short title This Act may be cited as the Partnership Act 1891 . 2. Commencement This Act shall come into operation on the first day of January 1892. 3. . . . . . . . . 4. Interpretation (1) In this Act, unless the contrary intention appears – business includes every trade, occupation or profession; Court means the Supreme Court, or a judge sitting in chambers or otherwise; Director means the Director of Consumer Affairs and Fair Trading holding office under section 9 of the Consumer Affairs Act 1988 and includes any person holding that office in an acting capacity; external partnership means a partnership (or legal entity, however described, in the nature of a partnership) formed in accordance with a law of another State, a Territory or another country or jurisdiction, whether or not under that law the liability of any partner for the liabilities of the partnership (or entity) is limited and whether or not under that law the partnership (or entity) is incorporated or is otherwise a separate legal entity; firm means a group of persons who have entered into partnership with one another; firm-name means – (a) in the case of a partnership, the name under which the business of the partnership is carried on; and (b) in the case of an external partnership, the name under which, in accordance with the law of the place in which it is formed, the partnership carries on the business of the partnership; and (c) in the case of a limited partnership or an incorporated limited partnership, the name of the partnership recorded in the Register; general partner means – (a) in the case of a limited partnership, a partner in the limited partnership who is not a limited partner; and (b) in the case of an incorporated limited partnership, a person or partnership (including an external partnership) who is admitted as a partner in the incorporated limited partnership in accordance with the partnership agreement and who is not a limited partner; incorporated limited partnership means an incorporated limited partnership registered in accordance with section 60 ; liability includes any debt, obligation or other liability of any kind, wherever and however incurred; limited partner means – (a) in the case of a limited partnership, a partner in the limited partnership whose liability for the liabilities of the partnership is limited in accordance with Part 3 ; and (b) in the case of an incorporated limited partnership, a person or partnership (including an external partnership) admitted and designated as a limited partner in the incorporated limited partnership in accordance with the partnership agreement; limited partnership means a partnership registered in accordance with section 60 ; partner in a limited partnership or an incorporated limited partnership means a general partner or a limited partner; partnership means a partnership within the meaning of section 6 ; Register means the Register of Limited Partnerships and Incorporated Limited Partnerships kept under this Act; registered particulars means particulars recorded in the Register under section 60(6) ; spouse includes the person with whom a person is, or was at the time of his or her death, in a significant relationship, within the meaning of the Relationships Act 2003 . (2) In 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 legal entity and not to the partners in that partnership. 5. Saving for rules of equity and common law The rules of equity and common law applicable to partnership shall continue in force, except so far as they are inconsistent with the express provisions of this Act. PART 2 - Partnerships generally Division 1 - Nature of partnership 6. Definition 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) The relation between members of any company or association which is – (a) registered as a company under the Corporations Act; or (b) formed or incorporated by or in pursuance of any other Act, or letters patent, or Royal Charter – (c) . . . . . . . . is not a partnership within the meaning of this Act. 7. Rules for determining existence of partnership In determining whether a partnership, other than an incorporated limited partnership, does or does not exist, regard shall 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 so held or owned, whether the tenants or owners do or do not share any profits made by the use thereof; (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; and (c) The receipt by a person of a share of the profits of a business is prima facie evidence that he 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 him 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 of itself make him 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 of itself make the servant or agent a partner in the business, or liable as such; (iii) a person being the spouse or child of a deceased partner, 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; (iiia) a person who, at the time of the death of a partner in a business, was in a caring relationship, which was the subject of a deed of relationship registered under Part 2 of the Relationships Act 2003 , with that partner, and who receives 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 shall receive a rate of interest varying with the profits, or shall receive a share of the profits arising from carrying on the business, does not of itself make the lender a partner with the person carrying on the business or liable as such, provided that the contract is in writing, and signed by or on behalf of all the parties thereto; and (v) a person receiving by way of annuity or otherwise a portion of the profits of a business in consideration of the sale by him of the goodwill of the business is not by reason only of such receipt a partner in the business, or liable as such. 8. Postponement of rights of person lending or selling in consideration of share of profits in case of insolvency of borrower or purchaser 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 seven , or of any buyer of a goodwill in consideration of a share of the profits of the business, being adjudged a bankrupt, entering into an arrangement to pay his creditors less than one hundred cents in the dollar, or dying in insolvent circumstances, the lender of the loan shall not be entitled to recover anything in respect of his loan, and the seller of the goodwill shall not be entitled to recover anything in respect of 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. 9. Meaning of firm 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. Division 2 - Relationships of partners to persons dealing with them 10. Power of partner to bind partnership (1) Every partner in a partnership, other than a limited partnership or an incorporated limited partnership, is an agent of the partnership and of the other partners for the purpose of the business of the partnership. (2) Any act of a partner in a partnership, other than a limited partnership or an incorporated limited partnership, done for carrying on in the usual way business of the kind carried on by the partnership binds the partnership and the other partners, unless – (a) the partner so acting has in fact no authority to act for the partnership in the particular matter; and (b) the person with whom he or she is dealing either – (i) knows that the partner has no such authority; or (ii) does not know or believe the partner to be a partner. (3) Every general partner in a limited partnership or an incorporated limited partnership is an agent of the partnership and of the other general partners for the purpose of the business of the partnership. (4) Any act of a general partner in a limited partnership or an incorporated limited partnership, done for carrying on in the usual way business of the kind carried on by the limited partnership, binds 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 – (i) knows that the general partner has no authority; or (ii) does not know or believe the general partner to be a general partner. 11. Partners bound by acts on behalf of firm or partnership (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 an incorporated limited partnership, and done or executed in the name of the partnership, 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 14(3) ) binding on the partnership 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. 12. Partner using credit of firm or partnership for purpose not connected with business (1) Where a 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 to do so by the other partners. (2) Where a general partner pledges the credit of an incorporated limited partnership for a purpose apparently not connected with the partnership's ordinary course of business, the partnership is not bound unless the general partner is in fact specially authorised to do so by the partnership. (3) This section does not affect any personal liability incurred by an individual partner or general partner. 13. Effect of notice that firm or partnership not bound by acts of partner (1) If it has been agreed between the partners of a firm, other than an incorporated limited partnership, that any restriction be placed on the power of any one or more of them to bind the firm, no act done in contravention of that agreement is binding on the firm in respect of any persons having notice of the agreement. (2) If it has been agreed between the partners of an incorporated limited partnership that any restriction be placed on the power of any one or more of them to bind the partnership, no act done in contravention of that agreement is binding on the partnership in respect of any persons having notice of the agreement. 14. 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 he or she is a partner and, after his or her death, his or her estate is also severally liable in a due course of administration for such debts and obligations, so far as they remain unsatisfied, but subject to the prior payment of any separate debts. (2) Every general partner in an incorporated limited partnership is liable jointly with the other partners for all debts and obligations of the partnership incurred while he or she is a partner and, after his or her death, his or her estate is also severally liable in a due course of administration for such debts and obligations, so far as they remain unsatisfied, but subject to the prior payment of any 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 that the incorporated limited partnership is unable to satisfy those debts and obligations; or (b) where any greater extent is provided by the partnership agreement, to that greater extent. 15. Liability for wrongs of partners (1) Subject to subsection (2) , where, by any wrongful act or omission of any partner acting in the ordinary course of the business of a firm, other than an incorporated limited partnership, or with the authority of his or her co-partners, 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 that loss, injury or penalty to the same extent as the partner so acting or omitting to act. (2) For the purposes of subsection (1) , a partner in a firm who commits a wrongful act or omission as a director of a body corporate, within the meaning of 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 co-partners only because of any one or more of the following: (a) the partner obtained the agreement or authority of the partner's co-partners, 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 co-partner is also a director of that or any other body corporate. (3) Subject to subsection (4) , where 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 in respect of that loss, injury or penalty to the same extent as the general partner so acting or omitting to act. (4) For the purposes of subsection (3) , a general partner in an incorporated limited partnership who commits a wrongful act or omission as a director of a body corporate, within the meaning of 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 one 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. 16. Misapplication of money or property received for or in custody of firm (1) In respect of a firm that is not an incorporated limited partnership, where – (a) one partner acting within the scope of his or her apparent authority receives the money or property of a third person and misapplies it; or (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 one or more of the partners while it is in the custody of the firm – the firm is liable to make good the loss. (2) In respect of an incorporated limited partnership, where – (a) a general partner acting within the scope of his or her apparent authority receives the money or property of a third person and misapplies it; or (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 one or more of the general partners while it is in the custody of the firm – the incorporated limited partnership is liable to make good the loss. 17. Liability for wrongs, joint and several (1) Every partner in a firm, other than an incorporated limited partnership, is liable jointly with his or her co-partners, and also severally, for everything for which the firm becomes liable under either section 15 or 16 while he or she is a partner of the firm. (2) Every general partner in an incorporated limited partnership is liable jointly with the other general partners, and also severally, for everything for which the partnership becomes liable under either section 15 or 16 while he or she is a general partner in the partnership. (3) Despite subsection (2) , a general partner in an incorporated limited partnership is only liable – (a) to the extent that the incorporated limited partnership is unable to satisfy the liability; or (b) to any greater extent provided by the partnership agreement. 18. Improper employment of trust property for partnership purposes (1) If a partner in a firm, other than an incorporated limited partnership, who is a trustee improperly employs trust property in the business or on account of the firm, no other partner is liable for the trust property to the persons beneficially interested in that property. (2) If a general partner in an incorporated limited partnership who is a trustee improperly employs trust property in the business or on account of the partnership, neither the partnership nor any other general partner is liable for the trust property to the persons beneficially interested in that property. (3) This section does not affect any liability incurred by any partner or general partner by reason of his or her having notice of a breach of trust. (4) This section does not prevent the recovery of trust money that is still in the possession or under the control of the firm. 19. Persons liable by holding out (1) A person who represents himself or herself, or who knowingly allows himself or herself to be represented, as a partner in a firm other than a limited partnership or an incorporated limited partnership is liable as a partner to any person who, on the faith of any such representation, gives credit to the firm, whether or not the representation has been made or communicated to that person by or with the knowledge of the person represented as a partner. (2) A person who represents himself or herself, or who knowingly allows himself or herself to be represented, as a partner in a limited partnership or an incorporated limited partnership is liable as a general partner to any person who, on the faith of any such representation, gives credit to the partnership, whether or not the representation has been made or communicated to that person by or with the knowledge of the person represented as a partner. (3) Where, after a partner's death, the partnership business is continued in the same 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 his or her executors, administrators, estate or effects liable for any partnership debts contracted after his or her death. 20. Admissions and representations of partners (1) An admission or representation made by any partner in a firm, other than a limited partnership or an incorporated limited partnership, concerning the firm's 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 an incorporated limited partnership, concerning the partnership's affairs, and in the ordinary course of its business, is evidence against the partnership. 21. Notice to partner to be notice to firm (1) Notice of any matter relating to partnership affairs given to any partner in a firm who usually acts in the partnership business, other than a partner in a limited partnership or an incorporated limited partnership, 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 of any matter relating to partnership affairs given to a general partner in a limited partnership or an incorporated limited partnership, who usually acts in the partnership business, operates as notice to the partnership, except in the case of a fraud on the partnership committed by or with the consent of that partner. 22. 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. (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. 23. Revocation of continuing guarantee by change in firm (1) A continuing guarantee given either to a firm or to a third person in respect of 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 respect of the transactions of which, the guarantee was given. (2) This section does not apply to, or in respect of, an incorporated limited partnership. Division 3 - Relationship between partners 24. 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 such consent may be either express or inferred from a course of dealing. 25. Partnership property (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, are called in this Act partnership property, and must be held and applied by the partners exclusively for the purposes of the partnership and in accordance with the partnership agreement. (2) The legal estate or interest in any land which belongs to the partnership shall devolve according to the nature and tenure thereof and the general rules of law thereto applicable, but in trust, as far as necessary, for the persons beneficially interested in the land under this section. (3) Where 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 or estate, and purchase other land or estate out of the profits to be used in like manner, the land or estate 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 or estate first-mentioned at the date of the purchase. (4) This section does not apply to, or in relation to, an incorporated limited partnership. 25A. 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, by virtue only of being a partner in the partnership, has any legal or beneficial interest in its partnership property. 26. 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. 27. Conversion into personal estate of land held as partnership property (1) Where land or any heritable interest in land has become partnership property, it is to be, unless the contrary intention appears, treated as between the partners (including the representatives of a deceased partner) as personal or movable, and not real or heritable, estate. (2) This section does not apply to or in respect of an incorporated limited partnership. 28. Procedure against partnership property for partner's separate judgment debt (1) A writ of execution shall not issue against any partnership property, except on a judgment against the firm. (2) The Court, or a judge, or a court having jurisdiction under the Debtors Act 1870 may, on the application by summons 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 thereon, 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 him in respect of 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 partners shall be at liberty at any time to redeem the interest charged, or, in case of sale being directed to purchase the same. (4) Subsections (2) and (3) do not apply to or in respect of an incorporated limited partnership. 29. Rules as to interests and duties of partners subject to special agreement (1) The interest of partners in the partnership property and their rights and duties in relation to the partnership are to be determined, subject to any agreement expressed 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 respect of payments made and personal liabilities incurred by him or her – (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 he or she 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 him or her; (e) every partner may take part in the management of the partnership business; (f) no partner is to be 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 one), and every partner may, when he or she thinks fit, have access to and inspect and copy any of them. (2) This section does not apply to or in respect of an incorporated limited partnership. 30. Expulsion of partner No majority of the partners can expel any partner unless a power to do so has been conferred by express agreement between the partners. 31. Retirement from partnership at will (1) Where 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 his intention so to do to all the other partners. (2) Where the partnership has originally been constituted by deed, a notice in writing, signed by the partner giving it, shall be sufficient for this purpose. (3) This section does not apply to or in respect of a limited partnership or an incorporated limited partnership. 32. Where partnership for term is continued over, continuance on old terms presumed (1) Where 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 such of them as habitually acted therein 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 to or in respect of an incorporated limited partnership. 33. Duty of partners to render accounts, &c. (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 in respect of all things affecting the partnership to any partner or his or her legal representatives. 34. Accountability of partners for private profits (1) Every partner must account to the firm for any benefit derived by him without the consent of the other partners from any transaction concerning the partnership, or from any use by him 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 thereof have been completely wound up, either by any surviving partner or by the representatives of the deceased partner. (3) This section does not apply to or in respect of an incorporated limited partnership. 35. 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, he or she 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 to or in respect of an incorporated limited partnership. 36. Rights of assignee of share in partnership (1) An assignment by any partner of his 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 accept the account of profits agreed to by the partners. (2) In the case of the dissolution of the partnership, whether as respects all the partners or as respects the assigning partner, the assignee is entitled to receive the share of the partnership assets to which the assigning partner is entitled as between himself 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 to or in respect of an incorporated limited partnership. Division 4 - Dissolution of partnership 36A. Application of Division This Division does not apply to or in respect of an incorporated limited partnership. 37. Dissolution by expiration or notice 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; or (c) if entered into for an undefined time, by any partner giving notice of his intention to dissolve the partnership; and in that 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. 38. Dissolution by bankruptcy, death, or charge (1) Subject to any agreement between the partners, every partnership is dissolved, as regards all the partners, by the death or bankruptcy of any partner. (2) A partnership may, at the option of the other partners, be dissolved if any partner suffers his share of the partnership property to be charged under this Act for his separate debt. 39. 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. 40. Dissolution by the Court On application by a partner, the Court may decree a dissolution of the partnership when – (a) . . . . . . . . (b) a partner, other than the partner suing, becomes in any other way permanently incapable of performing his part of the partnership contract; (c) a partner, other than the partner suing, has been guilty of such conduct as, 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) a partner, other than the partner suing, wilfully or persistently commits a breach of the partnership agreement, or otherwise so conducts himself in matters relating to the partnership business that it is not reasonably practicable for the other partners to carry on the business in partnership with him; (e) the business of the partnership can only be carried on at a loss; or (f) in any case circumstances have arisen which, in the opinion of the Court, render it just and equitable that the partnership be dissolved. 41. Rights of persons dealing with firm against apparent members of firm (1) Where a person deals with a firm after a change in its constitution he is entitled to treat all apparent members of the old firm as still being members of the firm until he has notice of the change. (2) An advertisement in the Gazette shall be notice as to persons who 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 bankrupt, 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, bankruptcy, or retirement respectively. 42. Right of partner 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 partners to concur for that purpose in all necessary and proper acts, if any, which cannot be done without their concurrence. 43. Continuing authority of partners for purposes of winding up 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. Provided that the firm is in no case bound by the acts of a partner who has become bankrupt; but this proviso does not affect the liability of any person who has after the bankruptcy represented himself or knowingly suffered himself to be represented as a partner of the bankrupt. 44. 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 respect of 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 such 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 representatives may on the termination of the partnership apply to the Court to wind up the business and affairs of the firm. 45. Apportionment of premium where partnership prematurely dissolved Where 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 the repayment of the premium, or of such part thereof 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. 46. Rights where partnership dissolved for fraud or misrepresentation Where a partnership contract is rescinded on the ground of the fraud or misrepresentation of one of the parties thereto, 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 him for the purchase of a share in the partnership, and for any capital contributed by him; (b) to stand in the place of the creditors of the firm for any payments made by him in respect of 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. 47. Right of outgoing partner in certain cases to share profits made after dissolution (1) Where 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 his estate, then, in the absence of any agreement to the contrary, the outgoing partner or his estate is entitled at the option of himself or his representatives to such share of the profits made since the dissolution as the Court may find to be attributable to the use of his share of the partnership assets, or to interest at the rate of six per cent per annum on the amount of his share of the partnership assets. (2) Provided that where 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 his 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 thereof, he is liable to account under the foregoing provisions of this section. 48. 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 respect of the outgoing or deceased partner's share is a debt accruing at the date of the dissolution or death. 49. Rule for distribution of assets on final settlement of accounts In settling accounts between the partners after a dissolution of partnership, the following rules shall, subject to any agreement, be observed: (a) Losses, including losses and deficiencies of capital, shall 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, shall be applied in the following manner and order: (i) In paying the debts and liabilities of the firm to persons who are not partners therein; (ii) In paying to each partner ratably what is due from the firm to him for advances as distinguished from capital; (iii) In paying to each partner ratably what is due from the firm to him in respect of capital; (iv) The ultimate residue, if any, shall be divided among the partners in the proportion in which profits are divisible. PART 3 - Limited Partnerships and Incorporated Limited Partnerships Division 1 - Preliminary 50. Application of other provisions of this Act (1) Parts 1 and 2 apply to limited partnerships and incorporated limited partnerships, except as provided by those Parts or this Part. (2) If a provision made by or under this Part relating to limited partnerships or incorporated limited partnerships is inconsistent with a provision made by or under any other Part that applies to limited partnerships or incorporated limited partnerships, respectively, the provision made by or under this Part prevails and the other provision is (to the extent of the inconsistency) of no force or effect in relation to limited partnerships or incorporated limited partnerships. Division 2 - Nature and formation of limited partnership and incorporated limited partnership 51. Limited partnership or incorporated limited partnership is formed on registration (1) A limited partnership is formed by and on registration of the partnership under this Part as a limited partnership. (2) An incorporated limited partnership is formed by and on registration of the partnership under this Part as an incorporated limited partnership. 52. Composition of limited partnership or incorporated limited partnership (1) A limited partnership or incorporated limited partnership must have – (a) at least one general partner; and (b) at least one limited partner. (2) A corporation may be a general partner or a limited partner in a limited partnership or incorporated limited partnership. (3) A partnership (including an external partnership) may be a general partner or a limited partner in a limited partnership or incorporated limited partnership. 53. Size of limited partnership or incorporated limited partnership (1) A limited partnership or incorporated limited partnership may have any number of limited partners. (2) An incorporated limited partnership must not have more than 20 general partners. (3) A limited partnership – (a) must not have more than 20 general partners; or (b) if the partnership is of a particular kind in respect of which a higher number of partners applies in accordance with section 115 (2) of the Corporations Act (and the partnership consists only of those general partners) – must not have more general partners than that higher number. (4) For the purposes of this section – (a) if a general partner is a partnership or external partnership and no partner in that partnership has, under the law of the place where the partnership is formed, limited liability for the liabilities of the partnership, the number of partners in that partnership is to be counted; and (b) if a general partner is a partnership or external partnership and any partner in that partnership has, under the law of the place where the partnership is formed, limited liability for the liabilities of the partnership, the number of partners in that partnership whose liability is not so limited is to be counted but no account is to be taken of the number of partners in that partnership whose liability is so limited. 54. Incorporated limited partnership is separate legal entity (1) An incorporated limited partnership – (a) is a body corporate with legal personality separate from that of the partners in it and with perpetual succession; and (b) may have a common seal; and (c) may sue and be sued in its firm-name. (2) The common seal of an incorporated limited partnership must be kept in such custody as the partnership directs and must not be used except as authorised by it. 55. Powers of incorporated limited partnership (1) An incorporated limited partnership has the legal capacity and powers of an individual and also all the powers of a body corporate including (for example) the power, whether within or outside Tasmania or outside Australia – (a) to carry on the business of the partnership; or (b) to enter into contracts or otherwise acquire rights or liabilities; or (c) to create, confer, vary or cancel interests in the partnership; or (d) to acquire, hold and dispose of real or personal property or an interest (whether beneficial or legal) in real or personal property; or (e) to appoint agents and attorneys, and act as agent for other persons; or (f) to form, and participate in the formation of, companies or incorporated limited partnerships; or (g) to participate in partnerships, trusts, joint ventures or other associations and other arrangements for the sharing of profits; or (h) to do such other things as it is authorised to do by or under this Act. (2) The powers of an incorporated limited partnership may be limited by the partnership agreement. 56. Partnership agreement (1) There must at all times be a written partnership agreement between the partners in an incorporated limited partnership. (2) The interests of the partners in an incorporated limited partnership and their rights and duties in relation to the partnership are, subject to this Act, to be determined in accordance with the agreement. (3) A partnership agreement also has effect as a contract between the incorporated limited partnership and each partner under which the partnership and each of the partners agree to observe and perform the agreement so far as it applies to them. 57. Relationship of partners in incorporated limited partnership to others and between themselves (1) Except as otherwise provided by the partnership agreement or agreed between the partners in an incorporated limited partnership – (a) a general partner, the partnership or an officer, employee, agent or representative of a general partner or of the partnership is not an agent of a limited partner and the acts of a general partner or of the partnership or of such an officer, employee, agent or representative do not bind a limited partner; and (b) a limited partner is not an agent of, nor fiduciary for, a general partner or of another limited partner or of or for the partnership and the acts of a limited partner do not bind a general partner, another limited partner or the partnership itself. (2) A reference in subsection (1) to a general partner includes, if the general partner is a partnership or an external partnership, a reference to a partner in that partnership. (3) Nothing in subsection (1) prevents the making of, or limits or restricts, an agreement between a partner (the "first person") and either another partner or the incorporated limited partnership (the "second person") under which – (a) the first person acts as an agent of the second person and, by so acting, binds the second person; or (b) the second person acts as an agent of the first person and, by so acting, binds the first person. (4) Any consent or authority that under this Act is required or permitted to be given by a partner or two or more partners or all the partners may, in the case of an incorporated limited partnership and without limiting any other way in which it might be given, be given by that partner or those partners by or under the partnership agreement either in relation to all cases, or in relation to all cases subject to specified exceptions, or in relation to any specified case or class of cases. (5) Any consent or authority that under this Act is required or permitted to be given by an incorporated limited partnership may, without limiting any other way in which it might be given, be given by a general partner or two or more general partners acting in accordance with the partnership agreement. (6) A limited partner, in the capacity of limited partner, is not a proper party to any proceeding commenced in a court or tribunal by or against the incorporated limited partnership, other than a proceeding commenced by the incorporated limited partnership against the limited partner or by the limited partner against the incorporated limited partnership. Division 3 - Registration of limited partnerships and incorporated limited partnerships 58. Who may apply for registration? (1) An application for registration as a limited partnership may be made by – (a) a partnership; or (b) any persons or partnerships (or both) proposing to be partners in the limited partnership. (2) An application for registration as an incorporated limited partnership may be made, in the circumstances described in subsection (3) , by – (a) a partnership (including an external partnership); or (b) any persons or partnerships (including external partnerships), or both, proposing to be partners in the proposed incorporated limited partnership. (3) The circumstances are – (a) that the partnership is registered under Part 2 of the Venture Capital Act 2002 of the Commonwealth, or a general partner in the partnership or a proposed general partner in the proposed incorporated limited partnership intends to apply for registration of the incorporated limited partnership or proposed partnership under that Part, as – (i) a VCLP within the meaning of that Act; or (ii) an AFOF within the meaning of that Act; or (iii) an ESVCLP within the meaning of that Act; or (b) that the partnership is a venture capital management partnership within the meaning of section 94D(3) of the Income Tax Assessment Act 1936 of the Commonwealth, or the partners in the partnership or the proposed partners in the proposed incorporated limited partnership intend that the partnership or proposed incorporated limited partnership will meet the requirements set out in that section for recognition as a venture capital management partnership; or (c) such other circumstances as are prescribed. 59. Application for registration (1) An application for registration of a limited partnership or incorporated limited partnership is to be made by lodging with the Director in accordance with this Part a statement signed – (a) if the application is made by a partnership (including an external partnership), either by each partner in the partnership or by a person given authority to make such an application on behalf of the partnership and the partners in it; or (b) in any other case, by each proposed partner. (2) The statement must be made in the form approved by the Director and must – (a) contain a statement of whether the partnership is to be registered as a limited partnership or as an incorporated limited partnership; and (b) in the case of an application by a partnership (including an external partnership), contain particulars of – (i) the firm-name of the partnership; and (ii) the full address of the office or principal office in Tasmania of the partnership (to be called the "registered office" of the proposed partnership); and (c) in the case of an application by persons or partnerships (including external partnerships) proposing to be the partners in the proposed partnership, contain particulars of – (i) the proposed firm-name of the proposed partnership; and (ii) the full address of the proposed office or principal office in Tasmania of the proposed partnership (to be called the "registered office" of the partnership); and (d) contain particulars of the full name of each partner or proposed partner or, if the partner or proposed partner is a partnership (including an external partnership), the name of that partnership or, if that partnership does not have a name, the full name of each partner in the partnership; and (e) in the case of an application by a partnership, contain particulars of its registered office or principal office and, in any other case, contain particulars of the full address of each partner or proposed partner, being (in the case of an individual) his or her principal place of residence or (in the case of a corporation or partnership) its registered office or principal place of business; and (f) contain a statement in relation to each partner or proposed partner that is an individual as to whether that partner or proposed partner is, or is proposed to be, a general partner or a limited partner; and (g) contain a statement in relation to each partner or proposed partner that is a corporation or a partnership that is, or is proposed to be, a partner a statement in relation to the corporation or partnership as to whether it is to be a general partner or a limited partner; and (h) contain a statement in relation to each partner or proposed partner that is a partnership to the effect that the partner or proposed partner is a partnership; and (i) in the case of an application for a limited partnership, contain a statement in relation to each limited partner to the effect that the partner is a limited partner whose liability to contribute is limited to the extent of the amount specified in the statement (being the amount of any capital, or the value of any property, that the limited partner has agreed to contribute to the partnership or, in the case of a limited partner that is a partnership, the aggregate amounts or values); and (j) in the case of an application by a partnership, or persons or partnerships proposing to be partners in a partnership, that intends to apply for registration as a VCLP, AFOF or ESVCLP under Part 2 of the Venture Capital Act 2002 of the Commonwealth, contain a statement that it or they so intend to apply; and (k) in the case of an application by a partnership that is registered as a VCLP, AFOF or ESVCLP under Part 2 of the Venture Capital Act 2002 of the Commonwealth, be accompanied by a copy of a document evidencing its status as a VCLP, AFOF or ESVCLP; and (l) in the case of an application by a partnership, or persons or partnerships proposing to be a partnership, that intends to meet the requirements for recognition as a venture capital management partnership set out in section 94D(3) of the Income Tax Assessment Act 1936 of the Commonwealth, contain a statement that it or they so intend to meet those requirements; and (m) in the case of an application by a partnership that is a venture capital management partnership within the meaning of section 94D(3) of the Income Tax Assessment Act 1936 of the Commonwealth, a statement that it is such a partnership; and (n) contain such other particulars as are required by the regulations or by the approved form of statement; and (o) be accompanied by the prescribed fee. 60. Registration of limited partnership (1) If an application for registration of a limited partnership or incorporated limited partnership has been duly made, the Director is to register the limited partnership or incorporated limited partnership. (2) However, the limited partnership or incorporated limited partnership is not to be registered if the Director is of the opinion that the firm-name would not be eligible for registration as a business name under the Business Names Act 1962 . (3) If the Director registers a limited partnership or an incorporated limited partnership, the firm-name of the partnership is its name as recorded in the Register. (4) On registration of a limited partnership as an incorporated limited partnership, the limited partnership ceases to be a limited partnership and the Director is to record the cancellation of its registration in the Register. (5) However, any liability of the firm or a partner in the limited partnership that arose before its registration as an incorporated limited partnership is to be dealt with as if it were still a limited partnership. (6) Registration is effected by recording in the Register the particulars in the statement lodged with the Director. 61. Acts preparatory to registration do not constitute partnership Any act done in connection with the making of an application for registration under this Part by or on behalf of persons or partnerships (including external partnerships) proposing to be the partners in a proposed partnership does not of itself create a partnership between those persons or partnerships. 62. Changes in registered particulars (1) If any change occurs in relation to the registered particulars of a limited partnership or incorporated limited partnership, a statement setting out the changed particulars must be lodged with the Director within 7 days after the change occurred. (2) The statement must be signed by all the general partners, or by a general partner authorised by all the general partners for the purposes of this section. (3) In the case of a limited partnership, if the change relates to the admission of a limited partner, or a change in the liability of a limited partner to contribute, the statement must also be signed – (a) by the limited partner concerned; or (b) if that limited partner is a limited partnership, by all the general partners in that limited partnership or by a general partner in that limited partnership authorised by all the general partners in that limited partnership for the purposes of this section. (4) The statement must – (a) be made in the form approved by the Director; and (b) contain the particulars required by the regulations or the approved form of statement; and (c) be accompanied by the prescribed fee. (5) If the statement is duly lodged, the Director is to record the change in the Register, unless, in the case of a limited partnership, as a result of a change in relation to the registered particulars, the partnership is not eligible to be registered as a limited partnership. (6) If subsection (1) is not complied with, each general partner of the limited partnership is guilty of an offence. Penalty: Fine not exceeding 10 penalty units. 63. Register of Limited Partnerships and Incorporated Limited Partnerships (1) The Director is to keep a register of limited partnerships and incorporated limited partnerships registered under this Part (to be called the Register of Limited Partnerships and Incorporated Limited Partnerships). (2) In the Register, there is to be a division of limited partnerships and a division of incorporated limited partnerships. (3) The Register may be kept in such form as the Director thinks fit. (4) The Director must make the information recorded in the Register available for public inspection, on payment of the prescribed fee, at the