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Partnership Act 1890

– Tel: 0161 832 6131 –

A partnership is formed whenever two or more people set up in business together with a view to share profits and losses and they do not incorporate, either as a limited company or an LLP.

The issue with partnerships under the Partnership Act 1890 is that the act is rather vague and not helpful at all to running a business.

There are some aspects of the Partnership Act 1890 which many of those in a partnership do not realise, for example:

  • A partner is not required actually to do anything towards running the business; i.e. they do not have to turn up to work
  • A partner shares equally in the profits of the business irrespective of the amount of time or effort he or she has put into the business
  • There are no set number of days holiday
  • A partner cannot retire. If one partner decides to leave or dies, the partnership has to be dissolved, the assets divided up and a new partnership (or other business) formed. This can be time-consuming, complicated, and expensive
  • A partner cannot be expelled

For these reasons we always recommend that all partners enter into a Partnership Agreement or Deed to regulate these matters and to allow the partnership to continue on the exit of one partner.

We also have a dedicated Partnership Law website where you can find more detailed information:

Partnership Law Website

For help and assistance on queries relating to the Partnership Act 1890, contact our partnership team on 0161 832 6131 or get in touch by filling out one of our online enquiry forms.

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