Partnership Essay

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FARIHANA BINTI ABDUL RAZAK (2014) 1 LAW 346 CHAPTER 2: PARTNERSHIP      The law of partnership is governed by the Partnership Act 1961 (Revised 1974). In Peninsular Malaysia, a partnership business must be registered under the Registration of Business Act 1956. In Sarawak, it must be registered under the Sarawak Cap.64 (Business Names) and Cap.33 (Business, Professions and Trade Licensing). In Sabah, it must be registered under the Trade Licensing Ordinance No. 16 1948. However the mere failure to register the partnership under these statutes would not mean that the partners cannot enforce their rights against each other if on the facts, a partnership exists.  Section 3 (1) of the PA 1961 defines a partnership as ‘the relation which subsists between persons carrying on business in common with a view of profit’.  Section 3 (2) of the PA 1961 states that the co-operative societies and registered statutory and chartered companies are specifically excluded from the definition. Nature of Partnership  A partnership need not have to be created by a formal deed or written agreement. It may be created orally or in writing.  Thus the definition of partnership in Section 3 (1) of the PA 1961 for a partnership to exist, two or more persons must be ‘carrying on business in common.’  The word ‘business’ has been defined in Section 2 of the PA 1961 as ‘including every trade, occupation or profession’. FARIHANA BINTI ABDUL RAZAK (2014) 2 LAW 346  Section 4 of the PA 1961 lays down the circumstances in which there are NO prima facie partnerships. a) Joint tenancy, tenancy in common, joint property, common property, or part ownership b) The sharing of gross returns c) The receipt by a person of a share of the profits of business is prima facie evidence that he is partner in the business, but the receipt such a share, or of a payment contingent on

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