Chapter 5Non-corporate organisations – sole traders and partnershipsSection 14 provides that the continued use of a deceased
partner’s name will not make his estate (that is, the
property he has left on death) liable for the debts of
the firm.
It is worth noting that the ‘holding out’ provisions of
s 14 are applied by the court when making a salaried
partner liable.
Membership of the firm
As we have seen, there is no limit on the number of per-
sons who may be partners in an unlimited or limited
partnership, nor is there any restriction on the number
of members in a limited liability partnership. This applies
to partnerships in all trades and professions though bar-
risters cannot practise together as partners. A barrister is
a sole practitioner practising with others from chambers
but not as partners.
Discrimination legislation is also applied to all part-
nerships regardless of size. The relevant areas are discrim-
ination on the grounds of sex, race, sexual orientation,
religion and belief, disability and age. There are excep-
tions for a genuine occupational requirement, as where
a male partner is required because the work will be with
a number of clients in countries that do not accept that
women can or should take on business roles.
However, so far as disability is concerned, it may be
that a disabled person can work successfully as a partner
if adjustments are made in, e.g. the physical environment.
There is a legal requirement to make these adjustments
where necessary and possible and, in the case of a part-
nership, regulations provide that a person who is or
becomes a partner can be required to bear such of the
costs of adjustment as are reasonable. These matters are
given further consideration in Chapter 16.
A minor may become a member of a partnership (Lovell
and Christmas v Beauchamp(1894)) but can avoid (get
out of ) the contract at any time while he is under 18 or
for a reasonable period of time afterwards.
Insofar as a partnership is set up by a contract, express
or implied, the Mental Capacity Act 2005 applies and
under it a person is assumed to have capacity unless it is
established that he or she lacks it. The court will make an
assessment mainly under s 3 of the 2005 Act, which sets
out circumstances of inability to make a decision, e.g. to
understand information relating to the decision – in this
case whether to become a partner. Failure to establish
capacity will prevent a partnership with the person con-
cerned from coming into force. The burden of proving
lack of capacity is on the person who says that capacity
is lacking and the burden is on a balance of probabilities
not beyond reasonable doubt. These capacity problems
are also dealt with in Chapter 7.The firm and the firm name
Generally
In English law the unlimited and limited partnership
firm is not an artificial person separate from the partners.
In other words, it is not a person (or persona) at law as a
company or LLP is.
If there are 10 partners in ‘Snooks, Twitchett & Co’,
then the firm name, that is ‘Snooks, Twitchett & Co’, is
only a convenient short form for (or a collective designa-
tion of ) all the partners. It saves reeling off all their
names when business is done. Thus, a contract can be
made in the firm name.
If the firm wishes to sue, or if it is sued by a creditor,
the Civil Procedure Rules (which are rules made by the
judges to deal with procedure in court) do give a sort of
personality to the firm in that they allow:
■actions by and against outsiders in the firm name;
‘Snooks, Twitchett & Co’ can sue or be sued in that
name;
■enforcement of judgments and orders against the
assets of the firm, as by taking and selling those assets
to pay the judgment creditor;
■HMRC to make an assessment to taxation on the firm
as such in respect of the profits (see further, Chap-
ter 4 ).
A judgment against the firm can also be enforced in
the same way against the private property of any partner
if the assets of the firm are not enough.
So, although in legal theory a partnership firm is not
a personaat law, for some practical purposes, e.g. con-
tracting, suing and being sued, and taxation, the firm is
regarded as a sort of independent entity.Choice of name
Restrictions on the name chosen for the firm are set out
below.