be paid, the reader is referred to the Act (ss. 5, 8-17), and the rules made thereunder. These rules will be found printed in the Weekly Notes, 1908, p. 1. The contribution, and any increase in the contribution, of a limited partner is subject to an ad valorem stamp of five shillings for every hundred pounds (s. 11). [Authorities. Generally, Lindley on Partnership, 7th ed., and Supplement; Pollock's Digest of the Law of Partnership, 8th ed., and Supplement. For forms of orders, see Seton. For the practice in the High Court, see Daniell's Chancery Practice, 7th ed.; The Annual Practice ; and in the County Court, The Annual County Court Practice.] Parties. Form and duration of PRECEDENTS. 1. ARTICLES OF PARTNERSHIP between Two TRADERS (a Concise Form). ARTICLES OF AGREEMENT,' made the day of BETWEEN [A. B.], of, &c., of the one part, and [C. D]., of, &c., of the other part, WHEREBY it is agreed that :— 1. The parties shall become and be partners under the firm of partnership."[B. & D.]" in the business of Place of business. Capital to be contributed. Relative shares. Monthly drafts. Rent of house. Lease of partnership premises. the for years from day of 19 or until the expiration of months' notice in writing to determine the partnership,2 left by either partner for the other at their place of business, at any time after the No. day of 2. The business shall be carried on in the messuage or shop Street, or such other place as the partners shall in 3. The capital of the partnership shall be the sum of £ to be contributed by the said [A. B.] and [C. D.] in equal shares. 4. The profits and losses shall belong to and be borne by the said [A. B.] and [C. D.] in equal shares. 5. The said [A. B.] may draw out of the profits, money not exceeding £ in each month; and the said [C. D.] may draw in each month. out of the profits, money not exceeding £ granted by a lease dated, &c., at a rent of £ as part of his contribution to capital.3 1 Stamp, 6d. 2 For form of notice to determine partnership, see Precedent XXIV. For a different arrangement with regard to the business premises, see Precedent II. cl. 8. Expenses. Servants, &c. Apprentice fees, &c. Books of account. Annual account. Restriction purchases. Not to give credit. Not to release debts, or incur liabilities. Power of expulsion. 7. The said rent, and all taxes, rates, repairs, and outgoings, in respect of the said messuage and shop, or other partnership place of business for the time being, or of the business, shall be paid out of the profits, or in case of deficiency of profits, then by the partners equally. 8. No apprentice, clerk, or servant, shall be taken, employed, or dismissed without the consent of both partners. 9. All premiums and fees taken with apprentices, or the like, shall be part of the profits. day of 10. The partners respectively shall cause all usual accounts and entries to be kept and made in proper books; And all securities and vouchers shall be kept at the place of business, or at the bankers of the partnership, and be open to the inspection of each partner. 11. Immediately after each in every year, the partners shall take an account and valuation of the effects, credits, and liabilities of the partnership, to be forthwith entered in two books, to be signed by the partners, each of whom is to retain The entries in such books shall be conclusive, except only as to such errors to the amount of £ as shall be complained of within months from such signing. The profits shall be divided as aforesaid, after the making up of such account. 12 No partner shall purchase goods to the amount of £ without the previous consent of the other in writing. one. 13. Either partner dealing with, or giving credit of goods or money to, any person after request to the contrary by the other, shall immediately pay to the other the full value or amount of such goods or money as liquidated damages.1 14. Neither partner shall, without the consent of the other, compound or discharge any liability to the partnership, or otherwise discharge or diminish any security to the partnership, or engage the partnership name on any negotiable or other security, or for any debt, otherwise than in the usual course of business, or make himself liable as bail or surety for any person or on any accommodation bill or note or policy of insurance, or enter into any wagering contract, or assign his share or interest in the partnership, or withdraw his share in the capital, or expose the partnership effects to the danger of being taken in execution or be concerned out of the partnership in the business of 15. If either partner shall infringe any of the clauses numbered 1 A clause is sometimes inserted in articles of partnership providing that a penalty or a specified sum by way of liquidated damages shall be payable on breach of any of the stipulations of the articles. But such clauses are of little, if any, use. The Court will relieve against such a penalty, and restrict the operation of the clause imposing it, so as to secure only the damage actually proved to have been incurred; and a general proviso that a specified sum shall be payable "as liquidated damages" on breach of any of a series of stipulations is nugatory, and the proviso will be construed to be for payment of a penalty. See Kemble v. Farren, 6 Bing. 141; Thompson v. Hudson, L. R. 4 H. L., at p. 30. But a clause providing that a specified or ascertainable sum shall be paid for the breach of a particular stipulation is enforceable. See Atkins v. Kinnear, 4 Ex. 776; Reynolds v. Bridge, 6 E. & B. 528. See further, LIQUIDATED DEMAND, Vol. VIII, P. 339. Proviso for purchase of retiring partner's share. 8, 10, 11, 12, 13, and 14 respectively, or become insane, or enter into any arrangement or composition for the benefit of his creditors, or shall (without the consent of the other partner) make any assignment, either absolutely or by way of mortgage, or declaration of trust of his share and interest in the partnership, or any part thereof, the other partner may forthwith determine the partnership by notice in writing, left at the place of business, and may thenceforth continue the business alone, and may advertise notice of the dissolution in the London Gazette, and, if necessary, sign the name of the infringing partner to such notice of dissolution." 4 16. On the death or bankruptcy of either partner,2 or on notice deceased or being given to either partner under clause 15, or by either partner under clause 1, his share in the effects may be purchased by the other at a valuation to be made by arbitrators or their umpire, as hereinafter mentioned; The price shall be paid by three equal instalments at the respective periods of six, twelve, and eighteen calendar months from such death: The payment of such instalments, with interest at the rate of £4 per centum per annum 3 for so much of the said price as shall for the time being remain unpaid at the date of payment of each such instalment, and also the indemnity of the retiring partner, or of the executors or administrators of the deceased partner, shall be secured by the purchaser's bond; And if the said [B.] shall be the purchaser, he may, at his option, cause the lease of the said messuage at to be included in such valuation and purchase; And, on such purchase, the share of the retiring or deceased partner in the profits, up to the day of dissolution, shall be ascertained and paid by the other forthwith. 17. Upon the determination of the partnership by effluxion of winding up time, or upon its determination by any means, if the option given determina- by the last preceding clause shall not have arisen or been exercised, partnership. then, as soon as conveniently may be, a full and general account Proviso for business on tion of and valuation shall be taken of the property, assets, and liabilities of the partnership, and the property and assets shall be sold and realised, and the debts due to the partnership shall be collected and got in, and the moneys arising thereby shall be applied in the first place in discharge of the liabilities of the partnership, and the expenses of and incident to the taking of the said account and valuation, and of and incident to such sale, realisation, and getting in as aforesaid, and in the next place in payment to each partner, or his representatives, of any unpaid profits due to him or them, and repayment of his or their share of capital, and the residue (if any) shall be divided between the partners, or their representatives, in equal shares ; and the partners, or their representatives shall execute 1 See Partnership Act, 1890, 53 & 54 Vict. c. 39, s. 37. 2 See Partnership Act, 1890, 53 & 54 Vict. c. 39, s. 33. 3 In the absence of express stipulation interest is not generally payable on the share of a partner after dissolution (Barfield v. Loughborough, L. R. 8 Ch. 1). 4 It should appear clearly that interest is to be payable on the unpaid balance, and not only on the amount of each instalment. See Orr Ewing v. Orr Ewing, 8 App. Cas. 822. Arbitration clause. Parties. Mutual Covenants. Business and duration of and do all such instruments and things for carrying out the realisation and division of the partnership assets, and particularly will execute such mutual indemnities and releases as may be reasonable and proper: PROVIDED ALWAYS, that if the proceeds of the realisation shall not be sufficient, after the discharge of the liabilities of the partnership, and of such expenses as aforesaid, and the payment of any such unpaid profits as aforesaid, to repay to the partners, or their representatives, their respective shares of capital in full, then such shares shall be repaid rateably so far as such proceeds shall extend, and neither partner nor his representatives shall have any claim on the other partner, or his representatives, in respect of the deficiency. 18. If at any time any dispute, doubt, or question shall arise between the said partners, or their respective executors or administrators, either on the construction of these presents, or respecting the accounts, transactions, profits, or losses of the business, or otherwise in relation to the partnership, then every such dispute, doubt, or question shall be referred to two arbitrators, or their umpire, to be appointed in the usual way, and such reference shall in all respects, as to the mode and consequences thereof, conform to the provisions in that behalf contained in the "Arbitration Act, 1889," or any statutory modification thereof for the time being subsisting. IN WITNESS, &c. II. ARTICLES OF PARTNERSHIP between THREE TRADERS, with Ordinary Clauses. day of 19 1 THIS INDENTURE,1 made the BETWEEN (A. B.], of, &c., of the first part; [C. D.], of, &c., of the second part; and [E. F.], of, &c., of the third part: WITNESSETH, that each of them the said [A. B.], [C. D.], and [E. F.] (so far as the covenants, stipulations, and provisions hereinafter contained are to be observed and performed by him, his executors or administrators), hereby covenants with the others of them jointly and severally in manner following, that is to say: 1. The said [A. B.], [C. D.], and [E. F.], and the survivors of them, shall become and henceforth continue partners in the partnership. trade or business of for the term of seven years from the day of the date of these presents, if the said partners or any two of them shall so long live, subject to the provisions hereinafter contained for determining the said partnership. Style of firm, and place of business. Power to determine by notice. 2. The said business shall be carried on under the style or firm of "[B.] and [Co.]," in the messuage belonging to the said [A. B], Street, in the city of or in such other place of in business as the said partners shall from time to time agree upon. 3. If on or at any time after the day of 19 partnership. any partner shall be desirous of retiring from the partnership, he shall be at liberty to give to the other partners or partner, or to leave for them or him at the place where the business shall for the 1 Stamp, 10s. Power of expulsion. Advertise ment of time being be carried on, notice in writing of such his desire and of his intention to determine the partnership so far as he is concerned1; and the partnership shall, at the expiration of six months after the giving or leaving of such notice, determine accordingly, as regards the partner giving such notice, subject nevertheless to the provisions contained in clause 25 of these presents. 4. If any of the said partners shall at any time become insane, or become insolvent,2 or make or enter into any arrangement or composition with his creditors whether statutory or otherwise, or shall knowingly do, permit, or omit any act or thing contrary to any of the covenants, stipulations, and provisions herein contained, or if he shall (except with the consent of the other partners or partner, or by reason of sickness or physical injury), absent himself from business for more than days at any one time, or more than days in any one year: Then, and in any of the said cases, the other partners or partner, if they or he shall think fit, shall be at liberty to give to the insane partner, or his committee, or to the partner who shall offend in any of the particulars aforesaid (as the case may require), or leave at the place where the business shall for the time being be carried on, a notice in writing desiring him to retire from the partnership, and declaring the partnership to be dissolved and determined: And the partnership shall, from the time of giving or leaving such notice, or from any other time to be therein specified for the purpose, determine accordingly as regards the partner to or for whom such notice shall be given or left, subject nevertheless to the provisions contained in clause 25 of these presents, and also subject and without prejudice to the remedies of the respective partners for the breach or non-observance or non-performance of all or any of the covenants, stipulations, and provisions herein contained. 5. If the partnership shall be determined by notice under either dissolution. of the preceding articles, the partner giving such notice shall be at liberty to cause a proper notice of the dissolution of the said partnership to be advertised in the London Gazette, and may, if necessary, sign the name of the partner to whom the said notice shall have been given to such advertisement or notice of dissolution.3 6. The capital of the partnership shall be the sum of £ to be contributed by the said partners in the following proportions, namely, the sum of £ being two-fourths thereof, by the said [A. B.]; the sum of £ , being one other fourth thereof, by the said [C. D.]; and the sum of £ Capital. , being the Interest on remaining fourth thereof, by the said [E. F.]: And they shall respectively be considered as creditors of the partnership in respect capital. For form of notice determining partnership, see Precedent XXIV. Bankruptcy ipso facto determines a partnership, Partnership Act, 1890, 53 & 54 Vict. c. 39, s. 33, p. 443. Insolvency in a clause of this nature includes liability to meet current liabilities, even though the person might be able to discharge his liabilities in full if his assets were all got in and realised. See Bayley v. Schofield, 1 M. & S. 338; Biddlecombe v. Bond, 4 A. & E. 332. 3 See Partnership Act, 1890, 53 & 54 Vict. c. 39, s. 37. VOL. X. 30 |