VIRGIN ISLANDS
The Partnership Act, 1996
Arrangement of Sections
Part
I - Short Title and Interpretation
1. Short title and commencement.
2. Interpretation.
Part
II - Nature of Partnership
3. Definition of partnership.
4. Rules for determining existence of partnership.
5. Postponement of rights of person lending or selling in consideration of share of profits in case of insolvency.
6. Nature
of partner's interest in partnership.
Part
III - Relation of Partners to Persons Dealing With Them
7. Power of partner to bind the firm.
8. Partners bound by acts on behalf of firm.
9. Partner using credit of firm for private purposes.
10. Effect of notice that firm will not be bound by acts of partner.
11. Liability of partners for debts and obligations.
12. Liability of the firm for wrongs.
13. Misapplication of money or property received for or in custody of the firm.
14. Liability of partners for wrongs.
15. Improper employment of trust property for partnership purposes.
16. Persons liable by "holding out".
17. Admissions and representations of partners.
18. Notice to acting partner to be notice to the firm.
19. Liabilities of incoming and outgoing partners.
20 . Revocation
of continuing guarantee by change in firm.
Part
IV- Relations of Partners to One Another
21. Variation by consent of terms of partnership.
22. Partnership property.
23. Property bought with partnership money.
24. Partnership property treated as personal or movable estate.
25. Procedure against partnership property for a partner's separate judgment debt.
26. Rules as to interests and duties of partners subject to special agreement.
27. Expulsion of partner.
28. Retirement from partnership at will.
29. Continuance on old terms presumed.
30. Duty of partners to render accounts, etc.
31. Accountability of partners for private profits.
32. Duty of partner not to compete with firm.
33. Rights
of assignee of share in partnership.
Part
V - Dissolution of Partnership and its Consequences
34. Dissolution by expiration or notice.
35. Dissolution by bankruptcy, death or charge.
36. Dissolution by illegality.
37. Dissolution by the court.
38. Rights of persons dealing with firm against apparent partners of firm.
39. Right of partners to notify dissolution.
40. Continuing authority of partners for purposes of winding up.
41. Rights of partners as to application of partnership property.
42. Apportionment of premium where partnership prematurely dissolved.
43. Rights where partnership dissolved for fraud or misrepresentation.
44 . Rights of outgoing partner in certain cases to share profits made after dissolution.
45. Retiring or deceased partner's share to be a debt.
46 . Rule
for distribution of assets on final settlement of accounts.
Part
VI - Limited Partnerships
47. Limited partnership.
48. Local limited Partnership.
49. International limited partnership.
50. Restrictions on limited partnership.
51. Effect of failure to satisfy the requirements of section 50.
52. Registrar.
53. Procedure for forming a limited partnership.
54. Establishment of register.
55. Certificate of Limited Partnership.
56. Effect of failure to register.
57. Amendment of the memorandum and articles of partnership.
58. Contribution.
59 Name.
60. Reservation of name.
61. Liability for false statements in Memorandum.
62. Liability of limited partner to third parties.
63. Admission of additional limited partners.
64. Rights, powers and liabilities of a general partner.
65. Rights of a limited partner.
66. Status of person erroneously believing himself to be a limited partner.
67. One person both general and limited partner.
68. Loans and other business transactions with limited partner.
69. Relation of limited partners inter se
70. Compensation of limited partner.
71. Withdrawal or reduction of limited partner's contribution.
72. Liability of limited partner to partnership.
73. Assignment of limited partner's interest.
74. Admission as a substituted limited partner.
75. Effect of retirement, death, incapacity or bankruptcy of a general partner.
76. Death of limited partner.
77. Rights of creditors or limited partner.
78. Distribution of assets.
79. Service of notice on partners.
80. Service of process, etc. on limited partnership.
81. Books and records.
82. Registered office.
83. Register of interests in limited partnership.
84. Registered agent.
85. Penalty for contravention of sections 82, 83 and 84.
86. Registered agent desiring to resign.
87. Licence fees.
88. Limited partnership struck off remains liable for fees, etc.
89 . Fees.
90. Recovery of penalties.
91. Fees, etc. to be paid into Consolidated Fund.
92. Fees payable to Registrar.
93. Exemptions from Tax, etc.
94. Regulations.
95. Form of certificate.
96. Certificate of good standing.
97. Inspection and copies of documents.
98. Appointment and duties of inspector.
99 . Minister's power to require production of documents.
100. Privileged information.
101. Provision for security of information obtained.
102. Powers of general partners in the event of dissolution.
103. Duties of liquidator.
104. Powers of liquidator.
105. Procedure on winding-up and dissolution.
l06. Rescission of dissolution.
l07. Winding-up and dissolution of limited partnership unable to pay claims etc.
108. Winding-up
where dissolution ordered by the court.
Part
VII -Miscellaneous
109. Declaration by the Court.
110. Application of Part VIII of Cap. 291.
111. Judge in Chambers.
112. Time for prosecution.
113. General penalty.
114. Repeals.
An Act to declare and amend the law of partnership and to declare the law relating to limited partnerships.
ENACTED by the Legislature of the Virgin Islands as follows:
PART I - Short Title and Interpretation
Short title and commencement
1. This Act may be cited as the Partnership Act, 1996 and shall come into force on the date which the Governor may appoint by proclamation published in the Gazette.
Interpretation
2.
In this Act, unless the contrary intention appears,
"articles means the articles of partnership of a limited partnership
formed under this Act;
"business" includes every trade, occupation or profession;
"court"
means the High Court or a Judge thereof;
"firm" means the group of persons who have entered into partnership
with one another;
"firm-name" means the name under which the business of a firm is
carried on;
"general partner", in relation to a limited partnership, means a
partner who is not a limited partner as defined herein;
"general partnership" means any partnership that is not a limited partnership;
"international
limited partnership" means the limited partnership referred to in section
49 of this Act;
"limited partnership" means a partnership formed under Part VI of
this Act referred to in section 47 of this Act;
"limited partner", in relation to a limited partnership, means a
partner who does not take part in the control of the partnership business
and whose liability is limited subject to the provisions of this Act;
"local limited partnership" means the limited partnership referred to in section 48 of this Act;
"memorandum" means the memorandum of partnership of a limited partnership formed under this Act;
"Minister" means the Minister responsible for finance;
"partner"
in relation to a limited partnership includes a limited partner and a general
partner;
"person" includes a natural person, a partnership general or limited,
domestic or foreign, a company, trust, estate, association, custodian, nominee
or any other individual or entity in its own or any representative capacity;
"register" means the register referred to in section 54 of this
Act;
"Registrar" means the Registrar of Limited Partnerships referred to in section 52 of this Act;
"substituted
limited partner" means a person who, after becoming an assignee of part
or all of the interest of a limited partner, is admitted to the limited partnership
pursuant to the provisions of its articles or, if the articles are silent
on the issue, is admitted with the unanimous consent of the partners.
PART
II - Nature Of Partnership
Definition of partnership
3.(1)
Partnership is the relation which subsists between persons carrying on a business
in common with a view of profit.
(2) The relation between members of any company or association
which is -
(a) registered as a company under the Companies Act or incorporated as a company under the International Business Companies Act; or
(b) formed or incorporated by or in pursuance of any other Act, letters patent or Royal Charter,
is not a partnership within the meaning of this Act.
Rules for determining existence of partnership
4 . In determining whether a partnership does or does not exist, regard shall be had to the following rules:
(a) all circumstances surrounding the contract are to be considered and the true intent of the parties is to be ascertained from their agreement, words and conduct;
(b) 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;
(c) 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
(d) 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 receipt of such a share, or of a payment contingent on or varying with the profits of a business, goes 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 widow 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;
(iv) the advance of money by way of loan to a person engaged or about to engage in any business on a contract in writing with that person, signed by or on behalf of all the parties thereto, that the lender shall receive a rate of interest varying with 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; 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.
Postponement of rights of person lending or selling in consideration
of share of profits in case of insolvency
5.(1) Where a person to whom money has been advanced by way of loan upon a contract as is mentioned in section 4(d)(iv) is adjudged bankrupt, enters into an arrangement to pay his creditors less than one hundred cents in the dollar or dies insolvent, the lender shall not be entitled to recover anything in respect of the loan until the claims of the borrower's other creditors for valuable consideration in money or money's worth have been satisfied.
(2) Where a person who, in consideration of a share of the profits of a business, has bought of its goodwill, is adjudged bankrupt, enters into an arrangement to pay his creditors less than one hundred cents in the dollar or dies insolvent, 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 buyer's other creditors for valuable consideration in money or money's worth are satisfied.
(3) Nothing in this section shall operate so as to prevent a secured creditor from retaining or realising his security.
Nature of partner's interest in partnership
6
. A partner's interest in a partnership within the meaning of this
Act is personal property situate in the Territory.
PART
III - Relations of Partners to Persons Dealing With Them
Power of partner to bind the firm
7 .(1) Every partner is an agent of the firm and his other partners for the purpose of the business of the partnership.
(2) The acts of every partner who does any act for carrying on in the usual way business of the kind carried on by the firm of which he is a partner bind the firm and his partners, unless the partner so acting
(a) has in fact no authority to act for the firm in the particular matter; and
(b) the person with whom he is dealing either knows that he has no authority or does not know or believe him to be a partner.
Partners bound by acts on behalf of firm
8.
An act or instrument relating to the business of the firm done or executed
in the firm- name, or in any other manner showing an intention to bind the
firm, by any person thereby authorised, whether a partner or not, is binding
on the firm and all the partners except that this section shall not affect
any general rule of law relating to the execution of deeds or negotiable instruments.
Partner using credit of firm for private purposes
9.
Where one partner pledges the credit of the firm for a purpose apparently
not connected with the firm's ordinary course of business, the firm is not
bound, unless he is in fact specially authorised by the other partners, but
this section does not affect any personal liability incurred by an individual
partner.
Effect of notice that firm will not be bound by acts of partner
10.
If it has been agreed between the partners that any restriction shall be placed
on the power of any one or more of them to bind the firm, no act done in contravention
of the agreement is binding on the firm with respect to persons having notice
of the agreement.
Liability of partners for debts and obligations
11.
Every partner in a firm is liable jointly with the other partners for all
debts and obligations of the firm incurred while he is a partner, and after
his death his estate is also severally liable in the due course of administration
for such debts and obligations, so far as they remain unsatisfied, but subject
to the prior payment of his separate debts.
Liability of the firm for wrongs
12.
Where, by any wrongful act or omission of any partner acting in the ordinary
course of the business of the firm, or with the authority of his 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 therefor to the same extent as
the partner so acting or omitting to act.
Misapplication
of money or property received
for or in custody of the firm
13. In the following cases, namely -
(a) where one partner acting within the scope of his apparent authority receives the money or property of a third person and misapplies it; and
(b) where a firm in the course of its business receives the 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.
Liability of partners for wrongs
14.
Every partner is liable jointly and severally with his co-partners for everything
for which the firm while he is a partner therein becomes liable under either
section 12 or section 13.
Improper employment of trust property for partnership
15. If a partner, being a trustee of a trust which is not part of the business of the firm of which he is a partner, improperly employs the 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 therein except that
(a) this section shall not affect any liability incurred by any partner by reason of his having notice of a breach of trust; and
(b) nothing in this section shall prevent trust money from being traced and recovered from the firm if still in its possession or under its control.
Persons liable by "holding out"
16.(1)
Everyone who by words spoken or written or by conduct represents himself,
or who knowingly suffers himself to be represented, as a partner in a particular
firm is liable as a partner to any one who has on the faith of any such 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)
Notwithstanding subsection (1) 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 thereof shall not of itself make
his executors or administrators of his estate liable for any partnership debts
contracted after his death.
Admissions and representations of partners
17. An admission or representation made by any partner concerning the firm's affairs, and in the ordinary course of its business, is evidence against the firm.
Notice to acting partner to be notice to the firm
18.
Notice to any partner 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.
Liabilities of incoming and outgoing partners
19.(1) A person who is admitted as a partner into an existing firm does not thereby become liable to the creditors of the firm for anything done before he became a partner.
(2)
A partner who retires from a firm does not thereby cease to be liable for
partnership debts or obligations incurred before his retirement.
(3) A retiring partner may be discharged from any existing
liabilities by an agreement to that effect between himself 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.
Revocation of continuing guarantee by change in firm
20.
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.
PART IV - Relations of Partners to One Another
Variation by consent of terms of partnership
21. 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.
Partnership property
22.(1) Subject to subsections (2) and (3) 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 shall 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 general rules of law thereto applicable, but in trust, so 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 first mentioned at the date of the purchase.
Property bought with partnership money
23. Unless the contrary intention appears, property bought with money belonging to the firm is deemed to have been bought on account of the firm.
Partnership property treated as personal or movable estate
24. Where land or any estate or interest therein has become partnership property, it shall, unless the contrary intention appears, be treated as between the partners (including the representatives of a deceased partner) , and also as between the heirs of a deceased partner and his executors or administrators, as personal or movable and not real estate.
Procedure
against partnership property for a
partner's separate judgment debt.
25.(1)
A writ of execution shall not issue against any partnership property except
on a judgment against the firm.
(2) A court 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 -
(a) 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
(b) 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 shall be at liberty at
any time to redeem the interest charged, or in the case of sale being directed,
to purchase the same.
Rules
as to interests and duties of partners
subject to special agreement.
26. The interests of partners in the partnership property and their rights and duties in relation to the partnership shall be determined, 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 shall contribute equally towards the losses whether of capital or otherwise sustained by the firm;
(b) the firm shall indemnify every partner in respect of payments made and personal liabilities incurred by him;
(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 has agreed to subscribe is entitled to interest at the rate of 10 per centum 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;
(e) every partner may take part in the management of the partnership business;
(f) no partner shall 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; and
(i) the partnership books are to be kept at the place of business of the partnership, or the principal place of business, if there is more than one; and every partner may, when he thinks fit, have access to and inspect and copy any of them.
Expulsion of partner
27. No majority of the partners can expel any partner unless a power to do so has been conferred by express agreement between the partners.
Retirement from partnership at will
28.(1) Where no fixed term has been agreed upon for the duration of a 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 or other instrument in writing, a notice in writing, signed by the partner giving it, shall be sufficient for this purpose.
Continuance on old terms presumed.
29.(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.
Duty of partners to render accounts, etc.
30. Partners are bound to render true accounts and full information of all things affecting the partnership to any partner, his agents or representatives.
Accountability of partners for private profits
31.(1) Every partner shall account to the firm for any benefit derived by him without the consent of the other partners
(a) from any transaction concerning the partnership; or
(b) 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 administrators of the deceased partner.
Duty of partner not to compete with firm
32. 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 must account for and pay over to the firm all profits made by him in that business.
Rights of assignee of share in partnership
33.(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
(a) interfere in the management or administration of the partnership business or affairs,
(b) require any accounts of the partnership transactions; or
(c) 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 case of a 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.
PART V- Dissolution of Partnership and its Consequences
Dissolution by expiration or notice
34. 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 to the other or others of his intention to dissolve the partnership, in which 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.
Dissolution by bankruptcy, death or charge
35.(1) Notwithstanding the provisions of section 21, every partnership is dissolved as regards all the partners by the death or bankruptcy of any partner unless all of the remaining partners vote within 90 days after the event giving rise to the dissolution to continue the partnership.
(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.
Dissolution by illegality
36.
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.
Dissolution by the court
37.(1)
On application by a partner the court may decree a dissolution of the partnership
in any of the following cases -
(a) when a partner is shown to the satisfaction of the court to be permanently of unsound mind in an application made on behalf of that partner by his committee or next friend or person having title to intervene or any other partner;
(b) when a partner, other than the partner suing, becomes in any way permanently incapable of performing his part of the partnership contract;
(c) when 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 prejudicially to affect the carrying on of the business;
(d) when 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 partner or partners to carry on the business in partnership with him;
(e) when the business of the partnership can only be carried on at a loss;
(f) whenever in any case circumstances have arisen which, in the opinion of the court, render it just and equitable that the partnership be dissolved.
Rights of persons dealing with firm against apparent partners of firm
38.(1)
Where a person deals with a firm after a change in its constitution
he is entitled to treat all apparent partners of the old firm as still being
partners of the firm until he has notice of the change.
(2)
An advertisement in the Gazette shall be sufficient 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 such death, bankruptcy or retirement.
Right of partners to notify dissolution.
39.
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
cannot be done without his or their concurrence.
Continuing authority of partners for purposes of winding up
40.(1)
Subject to subsection (2), 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)
The firm is in no case bound by the acts of a partner who has become bankrupt,
but this exception 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.
Rights of partners as to application of partnership property
41.(1) Subject to subsection (2), 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,
(a) to have the property of the partnership applied in payment of the debts and liabilities of the firm; and
(b) 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 partner to the firm, and for that purpose any partner or his executors or administrators may on the termination of the partnership apply to the court to wind up the business and affairs of the firm.
(2)
Where the dissolution of a partnership is caused by a wrongful act of a partner
in contravention of the partnership agreement such partner shall be entitled
only to the value of his interest in the partnership at the dissolution less
any damages payable by him to the other partners for his breach of the partnership
agreement.
Apportionment of premium where partnership prematurely dissolved
42. 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.
Rights where partnership dissolved for fraud or misrepresentation.
43.
Where a partnership contract is rescinded on the grounds 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.
Right of outgoing partner in certain cases to share profits made after dissolution
44.(1)
Where any partner 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 executors or administrators 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 such
rate as may be determined by the court.
(2)
Notwithstanding the provisions of subsection (1), 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 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 subsection (1).
Retiring or deceased partner's share to be a debt
45.
Subject to any agreement between the partners, the amount due from surviving
or continuing partners to an outgoing partner or the executors or administrators
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.
Rule for distribution of assets on final settlement of accounts
46.
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; and
(b) the assets of the firm including the sum, 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 rateably what is due from the firm to him for advances as distinguished from capital,
(iii) in paying to each partner rateably what is due from the firm to him in respect of capital, and
(iv) the ultimate residue, if any, shall be divided among the partners in the proportion in which profits are divisible.
PART
VI - Limited Partnerships
Limited partnerships
47.(1) A limited partnership is a partnership formed by two or more persons under this Part which has one or more general partners and one or more limited partners, and a limited partnership may be either a local limited partnership or an international limited partnership.
(2) A body corporate, with or without limited liability, or a partnership may be a general partner or a limited partner of a limited partnership.
(3)
Subject to sections 47 to 108, sections 1 to 46 shall apply to a limited partnership.
Local limited partnership
48. A local limited partnership may be established under this Act for any object or purpose not prohibited under this Act or any law for the time being in force in the Territory and subject to
(a) the conditions, limitations, restrictions and liabilities in its memorandum and articles; and
(b) subsection (1) of section 50.
International limited partnership
49. An international limited partnership may be established under this Act for any object or purpose not prohibited under this Act or under any law for the time being in force in the Territory and subject to
(a) the conditions, limitations, restrictions and liabilities in its memorandum and articles; and
(b) subsections (1) and (2) of section 50.
Restrictions on limited partnership
50.
(1) A limited partnership shall not carry on
(a) banking business;
(b) trust business;
(c) the business of insurance, reinsurance, insurance agent, insurance adjuster or insurance broker or any other kind of insurance business; or
(d) the business of company management unless it is licensed or is exempt from being licensed under the Company Management Act.
(2) An international limited partnership shall not
(a) carry on business with persons resident in the Territory;
(b) own an interest in real property situate in the Territory other than a lease referred to in paragraph (e) of subsection (3).
(3) For the purposes of paragraph (a) of subsection (2), an international limited partnership shall not be treated as carrying on business with persons resident in the Territory by reason only that
(a) it transacts banking business in the Territory with or through a bank licensed under the Banks and Trust Companies Act;
(b) it makes or maintains professional contact with solicitors, barristers, accountants, bookkeepers, trust companies, administration companies, investment advisers or other similar persons carrying on business within the Territory;
(c) it prepares or maintains books and records within the Territory;
(d) it holds, within the Territory, meetings of its partners;
(e) it holds a lease of property for use as an office from which to communicate with partners or where books and records of the partnership are prepared or maintained;
(f) it holds shares, debt obligations or other securities in a company incorporated under the International Business Companies Act; or
(g) any person resident in the Territory or any company registered under the Companies Act or incorporated under the International Business Companies Act is one of its partners.
(4) Notwithstanding anything to the contrary in this Act and in the Company Management Act, an international limited partnership
(a) may serve as a general partner of another international limited partnership;
(b) may hold, within the Territory, meetings of its partners, managers or advisers; and
(c) shall not be required to hold a licence under the provisions of the Company Management Act for the purposes mentioned in paragraphs (a) and (b).
Effect of failure to satisfy the requirements of section 50
51.(1) Where an international limited partnership is formed under this Act without having
satisfied the requirements prescribed for an international limited partnership by section 49, or if
having satisfied the requirements it subsequently ceases to satisfy the requirements for a
continuous period of thirty days, the international limited partnership shall, upon the expiration of
the period
notify the Registrar of that fact.
(2) A general partner of an international limited partnership that contravenes subsection (1)
commits an offence and shall be liable on summary conviction to a fine of $100 for each day or
part thereof
during which the contravention continues.
Registrar
52. The Registrar of Companies appointed under the Companies Act and any other officer so
appointed who acts under the delegated authority of the Registrar pursuant to section 207(6) of
the Companies
Act shall be the Registrar of Limited Partnerships.
Procedure for forming a limited partnership
53.(1) Two or more persons desiring to form a limited partnership shall execute articles
and shall submit them to the registered agent named in the articles and shall cause a
memorandum
to be submitted to the Registrar.
(2)
The memorandum shall include
(a)
the firm-name;
(b)
the objects and purposes for which the partnership is established;
(c)
the address of the registered office of the partnership in the Territory;
(d) the name and address of registered agent of the partnership in the
Territory;
(e)
the full name of each of the general partners and their respective addresses;
(f)
the term, if any, for which the partnership is to exist;
(g)
a statement that the partnership is limited;
(h) a statement that every partner not named as a general partner in the
memorandum
is a limited partner;
(i) in the case of an international limited partnership, a statement that the
limited partnership may not carry on the activities set forth in subsections
(1) and (2) of section 50 which statement shall set forth verbatim the
activities
described in that subsection; and
(j) such other information, if any, as the registered agent shall be instructed to
include
in the memorandum by the provisions of the articles.
(3) The memorandum shall be subscribed by the registered agent named in the
memorandum
in the presence of another person who shall sign his name as a witness
Establishment of register
54.(1) The Registrar shall establish and maintain in such form as he shall determine, a register of
limited partnerships in which shall be registered each memorandum submitted pursuant to
sections
53 and 57 and all certificates and advertisements required by this Act.
(2) The register shall be open, during office hours, to the inspection of all persons desiring to
view the
register.
(3) A certificate of the Registrar certifying that anything required by this Act to be registered
by him has been so registered shall be received in all courts and in all proceedings whatsoever as
evidence
of the matter to which the certificate relates.
Certificate of limited partnership
55.(1) Upon payment of the prescribed fee, the Registrar shall register each memorandum of
partnership submitted pursuant to section 53 and shall issue a certificate of limited partnership
under his hand and seal certifying that the partnership is formed in the Territory as a local limited
partnership
or an international limited partnership, as the case may be.
(2) Upon the issue by the Registrar of a certificate of limited partnership, the partnership is,
from the date shown on the certificate of limited partnership, a limited partnership under the
name contained
in the memorandum.
(3) A certificate of limited partnership of a limited partnership formed under this Act issued
by the Registrar is prima facie evidence of compliance with all requirements of this Act with
respect
to the formation of a limited partnership.
Effect of failure to register
56 . A limited partnership shall be registered as such in accordance with section 53 and in
default thereof it shall be deemed to be a general partnership and every partner thereof shall be
deemed
to be a general partner.
Amendment of the memorandum and articles of partnership
57.(1) The memorandum and articles may be amended in such manner as may be set forth in
the articles.
(2) Where a change is made or a change occurs in or with respect to any of the details set
forth in the memorandum registered with the Registrar the limited partnership shall cause a
supplementary
memorandum to be submitted to the Registrar.
(3) The supplementary memorandum referred to in subsection (2) shall be subscribed by the
registered agent named therein in the presence of another person who shall sign his name as a
witness.
(4) The Registrar shall upon payment of the prescribed fee register in the register each
supplementary memorandum submitted pursuant to this section and shall issue a certificate of
amendment
which shall set forth particulars of the amendment.
Contribution
58.
The contribution of a limited partner may be cash, property or services.
Name
59.(1) The name of each limited partnership formed under this Act shall have at its end
the words
"Limited Partnership" or the abbreviation "L.P."
(2)
The name of a limited partner shall not appear in the name of a limited partnership,
unless
(a)
it is also the name of a general partner; or
(b) prior to the time when the limited partner became a limited partner the
business had been carried on under a name in which the name of the
limited
partner appeared.
(3) A limited partner whose name appears in the name of a limited partnership contrary to the
provisions of subsection (2) is liable as a general partner to partnership creditors who extend
credit
to the partnership without actual knowledge that he is not a general partner.
(4)
No limited partnership shall be formed under this Act under a name that
(a) is identical with that under which a limited partnership in existence under
this Act is formed or a company is incorporated under the International
Business Companies Act or registered under the Companies Act, the
Limited Life Companies Act or the Business Names Registration Act or
so nearly resembles the name as to be calculated to deceive, except where
the partnership
or company in existence gives its consent; or
1. contains the words "Assurance", "Bank", "Chartered",
"Cooperative", "Imperial", "Insurance", "Municipal", "Royal",
"Trust", "Trustee" or a word or abbreviation conveying a similar
meaning, or any other word or abbreviation that, in the opinion of the
Registrar,
suggests or is calculated to suggest
(i) the patronage of Her Majesty or that of a member of the
Royal
Family;
(ii) a connection with Her Majesty' s Government or a
department
thereof; or
(iii) a connection with a municipality or other local authority or
with a society or body incorporated by Royal Charter,
except
with the approval of the Registrar in writing.
(5)
A limited partnership may amend its memorandum to change its name.
(6)
If a limited partnership formed under a name that
(a) is identical with a name under which a limited partnership in existence
under this Act is formed or under which a company in existence was
incorporated under the International Business Companies Act or registered
under
the Companies Act, or
(b)
so nearly resembles the name as to be calculated to deceive,
the Registrar may, without the consent of the limited partnership in existence, give notice to the
last registered limited partnership to change its name and if it fails to do so within 60 days from
the date of the notice, the Registrar shall amend the memorandum to change its name to such
name as the Registrar deems appropriate, and the Registrar shall publish notice of the change in
the Gazette.
(7) Subject to subsections (4) and (6) where a limited partnership changes its name, the
Registrar shall enter the new name on the register and, upon payment of the prescribed Fee, shall
issue
a certificate of amendment which shall set forth particulars of the amendment.
(8) A change of name does not affect any right or obligation of a limited partnership, or
render defective any legal proceedings by or against a limited partnership, and all legal
proceedings that have been commenced against a limited partnership in its former name may be
continued
against it in its new name.
Reservation of name
60.(1) Subject to subsection (4) of section 59 the Registrar may upon the application of any
person and upon payment of the prescribed fee, reserve for a period of ninety days a name for
future
adoption by a limited partnership under this Act.
(2) Once having reserved a name under subsection (1), the same applicant may, upon
payment
of the prescribed fee, again reserve the same name for successive ninety day
periods.
(3) The right to the exclusive use of a reserved name may be transferred to any other person
by paying the prescribed fee and by filing with the Registrar a notice of the transfer executed by
the applicant for whom the name was reserved specifying the name to be transferred and the
name and
address of the transferee.
Liability for false statements in Memorandum.
61. If a memorandum contains a false statement, one who suffers loss by reliance on such
statement may hold liable the general partners and the registered agent who made the statement
and who
knew or should have known the statement to be false
(a)
at the time the registered agent signed the memorandum; or
(b) after the memorandum was signed, but within a sufficient time before the
statement was relied upon to allow the filing of a supplementary
memorandum
with the necessary changes.
Liability of limited partner to third parties
62.(1) A limited partner is not liable for the obligations of a limited partnership unless he is also
a general partner or, in addition to the exercise of his rights and powers as a limited partner, he
participates in the control of the partnership business and, if the limited partner participates in the
control of partnership business, he is liable only to persons who transact business with the
limited partnership reasonably believing, based upon the limited partner's conduct, that the limited
partner
is a general partner.
(2) A limited partner shall not be deemed to participate in the control of the partnership
business within the meaning of subsection (1) by virtue of his possessing or, regardless of
whether or not the limited partner has the rights or powers, or exercising or attempting to exercise
one or more of the following rights or powers having or, regardless of whether or not the limited
partner has the rights or powers, acting or attempting to act in one or more of the following
capacities:
(a) to be an independent contractor for or to transact business with, including
being a contractor for, or to be an agent or employee of, the limited
partnership or a general partner, or to be a limited partner of a partnership
that is a general partner of the limited partnership, or to be a trustee,
administrator, executor, custodian or other fiduciary or beneficiary of an
estate or trust which is a general partner, or to be a trustee, officer, advisor,
stockholder or beneficiary of a business trust which is a general partner or
to be a member, manager agent or employee of a limited liability company
which
is a general partner;
(b) to consult with or advise a general partner with respect to any matter,
including
the business of the limited partnership;
(c) to act as surety, guarantor or endorser for the limited partnership or a
general partner, to guarantee or assume one or more obligations of the
limited partnership or a general partner, to borrow money from the limited
partnership or a general partner, to lend money to the limited partnership
or a general partner, or to provide collateral for the limited partnership or a
general
partner;
(d) to call, request, or attend or participate at a meeting of the partners or the
limited
partners;
(e)
to wind up a limited partnership pursuant to this Act;
(f) to take any action required or permitted by law to bring, pursue or settle or
otherwise terminate a derivative action in the right of the limited
partnership;
(g) to serve on a committee of the limited partnership or the limited partners
or to appoint, elect or otherwise participate in the choice of a representative
or another person to serve on any such committee, and to act as a member
of any such committee directly or by or through any such representative or
other
person;
(h) to act or cause the taking or refraining from the taking of any action,
including by proposing, approving, consenting or disapproving by voting
or otherwise,
with respect to one or more of the following matters:
(i) the dissolution and winding up of the limited partnership or an
election to continue the limited partnership or an election to
continue
the business of the limited partnership;
(ii) the sale, exchange, lease, mortgage, assignment, pledge or other
transfer of, or granting of a security interest in, any asset or assets
of the
limited partnership;
(iii) the incurrence, renewal, refinancing or payment or other discharge
of indebtedness
by the limited partnership;
(iv)
a change in the nature of the business;
(v)
the admission, removal or retention of a general partner;
(vi)
the admission, removal or retention of a limited partner;
(vii) a transaction or other matter involving an actual or potential
conflict
of interest;
(viii)
an amendment to the memorandum or articles of partnership;
(ix)
the merger or consolidation of a limited partnership;
(x) the making of or calling for or the making of other determinations
in connection
with contributions;
(xi)
the indemnification of any partner or other person; or
(xii) such other matters as are stated in the memorandum of partnership
or in
any written agreement;
(i) to serve on the board of directors or a committee of, to consult with or
advise, to be an officer, director, stockholder, partner (other than a general
partner of a general partner of the limited partnership), member, manager,
trustee, agent or employee of, or to be a fiduciary or contractor for, any
person in which the limited partnership has an interest or any person
providing management, consulting, advisory, custody or other services or
products for, to or on behalf of, or otherwise having a business or other
relationship with, the limited partnership or a general partner of the limited
partnership;
or
(j) any right or power granted or permitted to limited partners under this Act
and not
specifically enumerated in this subsection.
(3) The list of powers and capacities set forth in subsection (2) shall not be construed as
exclusive or as indicating that any other powers possessed or exercised or any other capacities
held or acted in by a limited partner shall be sufficient to cause the limited partner to be deemed to
take part
in the control of the partnership business within the meaning of subsection
(1).
(4) This section does not create rights or powers of limited partners, such rights and powers
may be created only by the memorandum and articles, a partnership agreement or any other
agreement
or in writing, or by other sections of this Act.
(5) A limited partner shall not be deemed to participate in the control of the partnership
business
within the meaning of subsection (1) by
(a) his possessing any one or more of the rights or powers set forth in
subsection (2) regardless of the nature, extent, scope, or frequency of his
possession
of the rights or powers; or
(b) his exercising or attempting to exercise one or more of the rights or
powers set forth in subsection (2) regardless of whether he possesses the
rights
or powers; or
(c) his holding or acting or attempting to act in one or more of the capacities
set forth in subsection (2) regardless of whether he has the right or power
to hold
or act in those capacities.
Admission of additional limited partners
63. After the formation of a limited partnership, additional limited partners may be admitted
upon making
an amendment to the articles.
Rights, powers and liabilities of a general partner
64. A general partner shall have all the rights and powers and be subject to all the restrictions
and liabilities of a partner in a partnership without limited partners, except that without the written
consent or ratification of the specific act by all the limited partners, a general partner or all the
general
partners have no authority to do any one or more of the following:
(a)
do any act in contravention of the articles;
(b) do any act which would make it impossible to carry on the ordinary
business
of the partnership;