Organisations Law : Partnership Act

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Organisations Law : Partnership Act

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Organisations Law : Partnership Act

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Describe about the Organisations Law for Partnership Act.

Dave and Grace Sullivan after completing 30 years of marriage together were getting divorced. Therefore, she wanted to know her rights and responsibilities related to the family business ‘Sullivan’s Camping Supplies’. The business was taken over by them in the same year when they got married which was initially of Dave’s father. So Family Law Act 1975 applies to all the couples who are married or who are in a living relationship as couples without marriage.
When couples decide to separate or end their relationship, than all the property so owned by both the spouses and persons should be divided equally in good faith. Property includes home, land, company or a business, cash, cars furniture etc.and also any property which was brought into by both the spouses, acquired in the course of marriage and acquired after separation as wife. It can be in the name of both the spouses and either one of them as the name can be changed from one person to another but it should be distributed equally (Women’s legal service NSW, 2016).
As mentioned in the above situation, business of Dave’s father was took over by Grace and Dave, so they are basically not operating a partnership business as nothing is expressly on  papers that they are running a partnership, As the business which is being taken care  by them was a acquired business given by Dave’s father to them which they are running. As per Partnership Act 1963 Section 6, “Partnership is the association between people who are in a business with a common goal of earning profit and includes an incorporated limited partnership”(Partnership Act, 1963; Australian Government;Australian Business Register,2016;Government of Western Australia, 2015).
A partnership can be registered or unregistered in nature. An unregistered partnership is not revealed in public and reporting essentials that are applied to large companies or partnership which are registered. Whereas it has limitless liability in which partners are personally responsible, jointly and severally for all the loans and liabilities of partnership (Addison, et al., 2013). But as it is a business acquired so it cannot be taken as partnership but if it is taken or suppose to be partnership then it can be taken as unregistered.
Although a partnership meant to be contracted between persons when they agree on the terms and conditions so stated in the agreement which they have in written to share all the profits of the business jointly. But it can be assumed in another way that partnership is their when two persons carry a business with a view to earn profit but don’t have anything in writing. As in this case it can be an assumed partnership as both the husband wife are carrying on business with a view to earn profit and have invested money I the same. Also as there is nothing in writing so it is presumed to be a partnership which is unregistered as not mentioned.
If it is assumed that there is Partnership between Dave and Grace, Yes partnership will be bound by this transaction. As they both are working in order to earn profit which they were earning by carrying on the business. As Dave has entered into contract to buy 2 tickets for himself and his girlfriend for which the money was paid from the business bank account. If the partnership would have been ended or would have come to an end then he would get half the amount in the account minus the price of tickets which he bought from the marital joint account of himself and his wife and his wife will get half the amount.
But as they are in assumed partnership so Dave have right to use the profit money which is there in the marital joint account as Grace also bears all the household and personal expenses from this account only. So it is up to Dave how he bears his money for his personal use but it should not be at the cost of others he is only liable for the expenses occurred on him. Therefore he can take out money from the marital bank account in order to fulfill his personal needs but have no right to use or spend money leisurely on others as from this same account his wife’s personal expenses are beared and also the household expense(Partnership Act, 1963).
Alongwith it his two teenagers are also being paid an hourly rate for any work they do in business. So the money should be spent keeping in mind the other people who will be paid or will be in need as if all the money is being spent leisurely then no money will be left and one day all the money will be finished.
Partnership Act, 1989 section 20 defines Liability of incoming and retiring partner as per which:

If a person become a partner in the firm already existing then he will not be made liable for any act done prior to his ad missal.
If a partner retires then he will not be liable for any debts’ or liabilities which took place before his retirement.
A retiring partner will not be liable for any liability existing by an agreement between the firm and him as it is a fresh constitution, the creditors and the agreement can be either expressed or implied.

As it is clearly mentioned above so Grace will not be liable for any of the debts which have occurred after she retires from the partnership. As no liability occur so no steps will be taken as it is clearly stated in a statute that no liability arises of any partner after he or she ceases to be partner in the firm for any of the debts occurred after her retirement.
Therefore in order to levy Grace to bear the expenses the primary condition which was to be fulfilled was she should have been a partner in the existing firm (Partnership Act, 1989).
Addison,A., Nettleton,J., Ryan,M. & Selig,D.(2013). Australia: Conducting Business in Australia: Business Structures. Retrieved on 17th Aug, 2016 from:
Australian Capital Territory.(2015). Partnership Act. ( 1963). Retrieved on 17th Aug, 2016 from:
Australian Capital Territory.(2015). Partnership Act. ( 1963). Retrieved on 17th Aug, 2016  from:
Australian Capital Territory.(2015). Partnership Act. ( 1963). Retrieved on 17th Aug, 2016 from:
Australian Capital Territory.(2015). Partnership Act. ( 1963). Retrieved on 17th Aug, 2016 from: partnership act in aus.
Australian Government;Australian Business Register.(2016).Partnership.Retrieved on 17th Aug, 2016 from:,-Super-funds—Charities/Applying-for-an-ABN/Business-structures/Partnership/.
Government of Western Australia.( 2015).Partnership.Retrieved on 17th Aug, 2016 from:
Women’s legal service NSW. (2016). Chapter 7: Property. Retrieved on 17th Aug, 2016 from:

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