Reading Essay

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LAW OF PARTNERSHIP The Partnership Act, 1961 (Revised 1974) is similar to the English Partnership Act, 1890. A number of principles of law arising from the English Act4 is applicable here. In fact section 47(1) of the Partnership Act provides that 'the rules of equity and of common law applicable in partnership shall continue in force, except so far as they are inconsistent with the express provisions' of the Act. MEANING AND NATURE OF PARTNERSHIP Partnership is defined by section 3(1) of the Act as : 'the relation which subsists between persons carrying on a business in common with a view of profit'. Section 3(2) excludes from the statutory definition of partnership, members of any company or association which is – the relation between (a) registered as a company under the Companies Act, 1965 or as a co-operative society under any written law relating to co-operative societies; or (b) formed or incorporated by or in pursuance of – 1) any other law having effect in Malaysia or any part thereof; or 2) letters patent. Royal Charter or Act of the Parliament of the United Kingdom. Clubs and societies as well as mutual benefit organisations and building societies cannot be considered as partnerships. It was held in Soh Hood Beng v. Khoo Chye Neo (1897) 4 SSLR 115 that a Chinese loan association is also not a partnership. Section 47(2) of the Act there cannot be an association of more than twenty persons formed or carrying on business in partnership contrary to section 14(3)(b) of the Companies Act, 1965. Characteristics of partnership 1. There must be more than one person to constitute a partnership. Daud, for example, cannot be a partner with himself. 2. There must be an agreement between the persons, express or implied, to have a business in common. In Mollowo, March &• Co v. Court of Wards (1872) LR 4 PC 419 at 436, 'To constitute a partnership the parties
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