THE LAW OF PARTNERSHIP.

Otago Witness, Issue 664, 20 August 1864, Page 4

THE LAW OF PARTNERSHIP.

The following interesting notice of a recent very important change in the law of partnership in England is proposed to be mada by a Bill now b- fore Parliament, will be interesting to men of Mmnes«. We quote from the City article of the Times :—

The Partnership AmPndment Bill, which passed its second readings last night in theHouse of Commons, propose^ to afford to commercial houses the facilities which, ia almost every other part of the world, are erj^yd under the commandite system. It provides that an? person may place a specific sum of money in a firm, and become a partner witb liability limited to the sum thus embarked. Such limited partner, however, is to refrain from all participation in tho conduct of the business, any departure from which prohibition is to render him forth witli liable as n general partner. He is also to become liable if he allow his name to appoar in the title of the firm. He is to be entitled from time to »ime to examina the books, ia order to asceitaia the amount of the t>rofits or lo«-es, and after bia withdrawal from the partnership he is not to ba liable for any debts except snch as were contracted previously to sucli withdrawal. In conatitutiner a limited partnership the following: particulars will have to be furnished within 15 days t> th° Registrar of Joint Stock Companies:— l. The full name and place of business of eaeb partner, at\d whether he he a general or limited partner. 2. The nature of the business, and the nla^e or pieces at which it is to be carried on. 3. The name of the firm in which the business is to he conducted. 4. The amount to be Jeni by e^ch liinitpd partner, and the time or timesat which it is to be repaid. The dissolution of a limi'ed partnership is to take place at the date fixed for the repayment of the njpney, or on the death or baukruptcv of one or more of the general partners. The partnership may be renewed on a frosh registration, aud •<lso the cum originally embarked may be increased by a further loan on fresh registration. Any clerk or se p vant may, under this A.ct, be allowed to share profits without incurring the liability of a partner ; but, except that lie will, unless a stipulation be made to the contrary, be entitled to ascertain the amount of nrost«,he is not thereby to acquire any of the rights of a peneral partner. The register books of all limited partnerships are to be open for Inspection at the office of the Registrar. The Bill likewise provides thßt partnerships may hereafter sue ia the name of the firm. These provisions merely remove disibiliries which ought never to have existed, go f \r from there being anything immoral or against the public welfare in loans being made to commercial persons in consideration of receiving a fair share of the profits which are realized throuah their agency, it is a most natural arrangement, and a law which prohibits such loan?, unless they are coupled with a condition that the lender shall become Ifable to the whole extent of oh fortune, is inconhiitent with every principle of commercial freedom. At the same time that it prevent* persons who are entitled to sunport and encouragement from obtaining aid that wou'd otherwise be 'accorded to them, it leaves the field open to unscrupulous adventurers, who will pay any fixed terras, ~ however preposterous, and assinn any security within their reach to g<it whatever sums they may desire. The result ia that when a break up ofcurs the parties who have made these loans are found to have ab«orbod the best portion of thfr assets, and to hare made exorbitant profits, nnd no los 3, while if the transaction had been, as now proposed, on the principle of sharing profits, the whole assets would have been divided among the general creditors, and the lendera would not hava received a farffeing until the creditors had hid 20s in tie pound. Another feature, however, of the existing system ia, that it stimulates the harpies who furnish mean.' to unscrupulous ppHona to encourage a course of recklessness ; whereas if the lender were interested in a division of honest profits, he would have every motive for keeping vigilant watch, and to enciuraga respectability and prudence on the part of those to whom he had committed bis fund*.