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Explanatory Material: Part 3—Nature of drafting changes

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Introduction»
Part 1—The revision process» 
Part 2—The exposure draft Bill»
Part 3—Nature of drafting changes
Part 4—Issues noted for possible future reform»


This Part records where the provisions of each Act can be found in the Bill and the general nature of the drafting change that has been made in each case.

The provisions with minor amendments to legal effect are also identified (see Part 2 for further information).

New provisionTitle of new provisionOld provisionGeneral nature of change
1 Title Short Title Partnership changed to Partnership Law.

This change will clarify the meaning of the Title as the Bill predominantly describes the legal rights and obligations that a partner of a partnership has vis-a-vis their partner(s) and third parties.  Second, it would be consistent with other Acts that have similar purposes, eg the Commercial and Contract Law Act 2017 and the Property Law Act 2007.

Revision power: section 31(2)(b)
2 Commencement n/a 6 months after the date of Royal assent.

Reflects approach taken in the first revision Bill (Contract and Commercial Law Act 2017).This was seen as giving a good lead-in time.

Revision power: section 31(2)(e)
3 Purpose of this Act Long Title Standard element in current drafting practice.

Revision power: section 31(2)(f)
4 Revision Act n/a Standard element in current drafting practice.

Revision power: section 31(2)(e) and (f)
5 Overview 1(4) Standard element in current drafting practice.

Revision power: section 31(2)(f)
6 Transitional, savings, and related provisions n/a Standard element in current drafting practice.

Revision power: section 31(2)(m)

See question 8 in Part 2: How should the Bill approach transitional arrangements?
7 Status of examples n/a Standard element in current drafting practice.

Revision power: section 31(2)(f)

See question 5 in Part 2: Would more examples make the Bill more accessible and readable?
8 Interpretation 2 Small changes to some defined terms.
(1) business 2 No change
(1) court 2 Minor grammatical change Revision power: section 31(2)(e)
(1) firm and firm name  see clause 12
(1) partnership  see clauses 10 and 11
(1) partnership property  see clause 38(2)
(1) personal representative  see clauses 42(2)(a), 59(2), 81(2), and 83
(2) leaves firm  see clause 55
9 Act binds the Crown n/a The Act explicitly binds the Crown.

Standard element in current drafting practice.

Revision power: section 31(2)(e), (i)

See questions 6 and 7 in Part 2: Can an intention to bind the Crown be implied because the terms of the 1908 Act make it apparent that the Act’s purpose must be wholly frustrated unless the Crown were bound?

Would expressly providing for the Partnership Act to bind the Crown be a minor amendment within the powers of section 31(2)(i) of the Legislation Act 2012?
10 Definition of partnership 4(1) Plain language:
  • section 4(1) and (2) have been restructured as clauses 10 and 11
  • replaced “subsists” with “exists”.
  • Revision power: section 31(2)(e)
11 Relationships that are not partnerships 4(2) Plain language:
  • section 4(1) and (2) have been restructured as clauses 10 and 11
  • omitted obsolete terms (joint-stock, trading, or mining companies)
  • expressly refers to limited partnerships
  • replaced “company” with “body corporate” in paragraph (c) to better reflect Parliament’s intent under section 31(2)(i).
Revision power: section 31(2)(e) and (i)
12 Meaning of firm and firm name 7 Plain language: section 7 has been restructured as 2 paragraphs.

Revision power: section 31(2)(e)
13 Determining whether partnership exists 5 Plain language: section 5 has been restructured as 5 clauses (clauses 13 to 17).

Revision power: section 31(2)(e)
14 Co-ownership of property 5(a) Plain language: minor grammatical changes reflect current drafting style.

Revision power: section 31(2)(e)
15 Sharing gross returns 5(b) Plain language: minor grammatical changes reflect current drafting style.

Revision power: section 31(2)(e)
16 Effect of receiving share of profits 5(c) Plain language:
  • minor grammatical changes reflect current drafting style
  • “prima facie” replaced with “presumed in the absence of evidence to the contrary”.  The note in the Bill explains the reason for the change and cites case law to support it. The note includes 4 other alternatives to “prima facie” and invites feedback on the options.
Revision power: section 31(2)(e)
17 Where receiving profits or payments does not make person partner or liable as partner 5(c) Plain language:
  • minor structural changes support rewrite as a separate clause
  • replaced “servant” with “employee”
  • replaced “portion of the profits made in the business” with “share of the profits of the business” to be consistent with other provisions in the 1908 Act (revision power: section 31(2)(i)).
Revision power: section 31(2)(e)

The proviso to section 5(c)(iv) has been rewritten as clause 17(4) because modern Acts do not include provisos like this.

The note in the Bill explains the change and invites feedback on whether subclause (4) preserves the legal effect of the proviso.

Revision power: section 31(2)(e))
18 What happens if borrower or buyer is insolvent 6 Plain language:
  • replaced “less than 100 cents in the dollar with “less than the full amount”
  • removed “his or her” construction
  • divided into 4 subclauses
  • “last preceding section” replaced with specific cross-reference.
Revision power: section 31(2)(e)

We invite feedback on 2 minor amendments in this clause that we have made to clarify Parliament’s intent:
  • section 6 of the 1908 Act does not expressly apply to liquidation of a body corporate.  In the note under clause 18(1)(a) in the Bill, we invite feedback on whether the clause should be expanded to cover liquidation
  • section 6 arguably does not affect a lender’s rights under a security interest that secures the repayment of a loan. Should we clarify that this clause does not limit security interests?
Revision power: section 31(2)(i)
19 Partner is agent of firm and other partners 8 Section 8 has been restructured as 2 clauses. Clause 19 reflects the first element in clause 8 with very little change.

Gender-neutral: removed “he or she” and “his or her” construction”.

Revision power: section 31(2)(e)
20 Power of partner to bind firm 8 Plain language:
  • removed “he or she” and “his or her” constructions:
  • restructured in 2 subclauses.
Revision power: section 31(2)(e)
21 Effect of notice that firm will not be bound by acts of partner 11 Minor grammatical changes to support change from a section to a clause with 2 subclauses and paragraphs.

Clause moved to more logical placement.

Revision power: section 31(2)(e)
22 Partners bound by acts done or instruments executed on behalf of firm 9 Plain language:
  • section heading changed to include “instruments executed” to better reflect the content of the clause
  • minor grammatical changes support the change from a section to a clause with 2 subclauses and paragraphs
  • archaic language omitted, eg “thereto”
  • more active construction
  • the proviso to section 9 has been rewritten as subclause (2) because modern Acts do not include provisos like this.
Revision power: section 31(2)(e)
23 Partner using credit of firm for private purposes 10 Plain language:
  • minor grammatical changes support the change from a section to a clause with 3 subclauses
  • removed “he or she” construction
  • replaced “individual partner” with “particular partner”.
Revision power: section 31(2)(e)
24 Liability of partners for firm’s debts and obligations 12 Plain language:
  • minor grammatical changes support the change from a section to a clause with 3 subclauses.
  • removed “he or she” and “his or her” constructions
  • removed unnecessary words “in a due course of administration”.
Revision power: section 31(2)(e)
25 Liability of firm for partner’s wrongful acts or omissions 13 Plain language:
  • minor grammatical changes support the change from a section to a clause with 2 subclauses and paragraphs
  • heading clarifies that the firm’s liability is for partner’s wrongful acts or omissions (ie, not just “wrongs”)
  • removed “he or she” and “his or her” constructions
  • omitted archaic language “therefor”
  • simplified references to the partner, which shortens the sentence.
Revision power: section 31(2)(e)
26 Misapplication of money or property received for or in custody of firm 14 Plain language:
  • minor grammatical changes
  • restructure to avoid out-dated structure
  • removed “he or she” and “his or her” constructions
  • retained in paragraph (a)(i) the wording in paragraph (a) in the 1908 Act that a partner receives the money within the scope of the partner’s apparent authority. The new structure clarifies that the “apparent authority” reference does not extend to misapplying the money or property.
Revision power: section 31(2)(e)
27 Liability for wrongs is joint and several 15 Plain language:
  • improved clarity of heading by including a verb
  • minor grammatical changes
  • removed “he or she” and “his or her” construction
  • omitted archaic language “therein”
  • cross-references rather than “2 last preceding sections”.
Revision power: section 31(2)(e)
28 Improper use of trust property for partnership purposes 16 Plain language:
  • replaced “employment” and “employs” with “use” and “uses”
  • replaced “on account of” with “for”
  • restated in 2 subclauses
  • replaced “person beneficially interested therein” with “beneficiaries”
  • replaced “in the business or on account of the partnership” with “in the partnership business or for the partnership”
  • replaced “shall not” with “does not”
  • minor grammatical changes
  • replaced proviso with subclause (2) as modern Acts do not contain provisos like this
  • removed “his or her” construction.
Revision power: section 31(2)(e)

In the note in the Bill, we alert you to an amendment made to clarify Parliament’s intent.  Section 16(b) of the 1908 Act refers to “trust money”, but the rest of the section refers to “trust property”.  Clause 28(2)(b) refers to “trust property” for consistency.

Revision power: section 31(2)(i)
29 Persons liable if they represent themselves as partner 17(1) Section 17 has been replaced by clauses 29 and 30.

Plain language:
  • updated heading to clarify that “holding out” means to represent oneself as a partner
  • clarifies references to different partners involved in order to shorten the text
  • made minor grammatical changes to accommodate the change from 1 subsection to 4 subclauses
  • removed “himself or herself” construction
  • replaced “suffers” with “allows”
  • replaced “on the faith of” with “in reliance on”. We invite feedback on whether you think the terms have the same meaning.
Revision power: section 31(2)(e)
30 Continued use of firm name when partner dies 17(2) Plain language:
  • minor grammatical changes to accommodate the change from 1 subsection to 2 subclauses
  • omitted archaic language eg “thereof”, “shall”
  • replaced “of itself” with “by itself”.
In the Bill, we have drawn your attention to whether it is correct to refer to the partner’s estate here. The note in the Bill details the different ways estates have been referred to in various sections of the 1908 Act.

Revision power: section 31(2)(e)
31 Admissions and representations of partners 18 Plain language:
  • minor grammatical changes to accommodate the new paragraph structure that aids clarity and improves readability.
Revision power: section 31(2)(e)
32 Notice of acting partner is notice to firm 19 Plain language:
  • minor grammatical changes to accommodate the change from 1 subsection to 2 subclauses with paragraphs with main message appearing earlier in the sentence
  • replaced fraud “on” the firm with fraud committed “against” the firm.
Revision power: section 31(2)(e)
33 Liability of incoming partner 20(1) Section 20 has been replaced by clauses 33 and 34 to separate the liabilities of incoming partners from those of partners who leave a firm.

Plain language: replaced “he or she” construction, and omitted archaic word “thereby”.

Revision power: section 31(2)(e)
34 Liability of partner who leaves firm 20(2), (3) Plain language:
  • grammatical changes, restructured in paragraphs
  • removed “his or her” and “himself or herself” constructions
  • replaced “constituted” with “composed” in terms of the new membership of a firm
  • replaced “creditors” with “creditor” to clarify that an agreement can be reached on a per creditor basis
  • omitted archaic “thereby”.
Revision power: section 31(2)(e)

In the note in the Bill, we alert you to variations in the way section 20(2) and (3) of the 1908 Act refer to a partner who retires/a retiring partner.  Terminology in other sections of the Act is also affected.  We are seeking your feedback on whether to replace the reference to retirement with a reference to leaving the firm (combined with the definition in clause 8(2)) to clarify Parliament’s intent.

Revision power: section 31(2)(i)
35 Rights of persons dealing with firm against apparent members of firm 39 Plain language:
  • replaced a firm’s “constitution” with “composition”
  • replaced “entitled to” with “may”
  • removed an unnecessary reference to “estate of a partner”
  • relative clause restructured
  • clause moved to more logical place
  • omitted archaic term “shall”.
Revision power: section 31(2)(e)

We have added an example to:
  • clause 35(2) to illustrate the rights of a person dealing with a firm when the firm’s composition changes
  • clause 35(3) to illustrate when a retired partner is not liable for post-retirement debts.
Revision power: section 31(2)(f)
36 Continuing guarantee revoked by change in firm 21 Plain language:
  • restructured for clarity
  • heading changed from passive to active voice
  • replaced a firm’s “constitution” with “composition”
  • updated spelling of “guaranty” to “guarantee”.
Revision power: section 31(2)(e)
37 Partners’ rights and duties may be varied by consent 22 Plain language:
  • heading changed to better reflect clause content
  • replaced “ascertained by agreement” with “result from agreement”
  • restructured for clarity.
Revision power: section 31(2)(e)
38 Partnership property 23(1) Plain language:
  • section 23 has been restructured as clauses 38 to 40
  • substantive provision separated from definition
  • substantive provision given more prominence by being placed first
  • replaced “on account of” with “for”, which makes it consistent with clauses 23(1) and 28.
Revision power: section 31(2)(e)
39 Partnership land 23(2) Plain language:
  • replaced “shall devolve” with “devolves”
  • omitted “thereof” and “thereto”.
Revision power: section 31(2)(e)


We have added an example to illustrate how any interest in partnership land belongs to the partnership under a partnership agreement.

Revision power: section 31(2)(f)
40 Co-owners of land who purchase other land out of profits 23(3) Plain language:
  • defined original land and second property to aid clarity
  • replaced “as to profits” with “with regard to profits”
  • for consistency, changed reference to “land or estate” to “an estate or interest in land”
  • removed “absence” in favour of plainer formulation
  • removed unnecessary word “respective”
  • restructured into 3 subclauses.
In the Bill, we alert you to the change from purchased land being used in “like manner” to in the “same manner”. We invite feedback on whether the 2 terms have the same legal effect.

Revision power: section 31(2)(e)
41 Property bought with partnership money 24 Plain language:
  • replaced “is deemed to have been” with “must be treated as having been” (consistent with current drafting style)
  • replaced “on account of” with “for”.
Revision power: section 31(2)(e)
42 Partnership land treated as personal property as between partners 25 Plain language:
  • replaced references to “representative” and to “executors or administrators” with “personal representative” for consistency (seesection 46 of the Limitation Act 2010). The same issue applies in section 32 of the 1908 Act (clause 59)
  • replaced “shall” with “must”
  • replaced “real estate” with “real property” and “personal estate” with “personal property”
  • restructured in 3 subclauses to separate the rule that applies when the partner is deceased.
Revision power: section 31(2)(e)
43 Writ of execution against partnership property 26(1) Plain language:
  • section 26 has been restructured as clauses 43 to 45
  • replaced “shall” with must”.
Revision power: section 31(2)(e)
44 Court may charge partner’s interest for their separate judgment debt 26(2), (2A) Plain language:
  • removed “thereof”
  • removed “him or her” construction
  • replaced “thereon” with “on that debt”
  • omitted “by summons” as the application procedure is better set by the rules of the court
  • replaced “any other money coming to” with “any other money that would otherwise be payable to”.
  • restructured into 3 paragraphs for clarity.
Revision power: section 31(2)(e)
The note in the Bill draws your attention to inconsistent references to orders and directions in the 1908 Act. Subclause 26(2) refers to orders and directions, but subclause 26(2A) refers to orders. We have resolved this by extending subclause 44(3).  We invite feedback on whether this minor amendment to clarify Parliament’s intent under section 31(2)(i) is justified.
45 Other partners may redeem or purchase interest 26(3) The words “the same” replaced with a clear reference to “the interest”.

Plain language: replaced “shall be at liberty to” with “may”.

Revision power: section 31(2)(e)
46 Rules about interests and duties of partners 27 Plain language:
  • section 27 has been restructured as clauses 46 to 54
Revision power: section 31(2)(e)

A note in the Bill draws your attention to the fact that section 27 of the 1908 Act refers to “any agreement (express or implied) between the partners”, but section 20(3) (now clause 34(3)) refers to an agreement being either express or “inferred as a fact from the course of dealing”. Do you think we should align these provisions and specify that the agreement in clause 46(2) should be “inferred as a fact from the course of dealing”?

Revision power: section 31(2)(e)
47 Partners share equally in capital and profits and contribute equally to losses 27(a) Plain language:
  • omitted “sustained by”
  • a note in the Bill explains that “business” has been changed to “partnership business” in clause 47(1) to make the references consistent throughout the Bill.
Revision power: section 31(2)(e)
48 Firm must indemnify partner for payments made, and personal liabilities incurred, for firm 27(b) Plain language:
  • replaced “in respect of” with “for”
  • removed “him or her” construction
  • replaced “preservation” with “preserve”
  • replaced “business” with “partnership business” (see note under clause 47 above).
Revision power: section 31(2)(e)
49 Entitlement to interest 27(c), (d) Plain language:
  • replaced “beyond the amount of” with “more than”
  • removed “he or she” construction
  • replaced “subscribe” with “provide”
  • replaced “per annum” with “per year”.
Interest rate of 5%: see note under clause 81 below.

Revision power: section 31(2)(e)
50 Partner may manage business 27(e) No change.
51 Partner not entitled to remuneration 27(f) Plain language: replaced “shall be” with “is”.

Revision power: section 31(2)(e)
52 No new partner without consent 27(g) No change.
53 Most decisions may be made by majority 27(h) Plain language:
  •  replaced “arising as to” with “about”
    • split into 2 subclauses.
Revision power: section 31(2)(e)
54 Access to [accounting?] records 27(i) Plain language:
  • replaced “are to be” with “must”
  • removed “he or she” construction
    • split into 2 subclauses.
Revision power: section 31(2)(e)

A note in the Bill provides some background as to why we think “books” in section 27(i) of the 1908 should be updated to “records” or even “accounting records”.  We welcome feedback on this.

Revision power: section 31(2)(e)
55 Expulsion of partner 28 Plain language:
  • replaced “any partner” with “a partner”
  • replaced “conferred” with “given”.
Revision power: section 31(2)(e)
56 Ending partnership at will 29 Plain language:
  • heading: replaced “Retirement from partnership” with “Ending”
  • replaced “where” with “if”
  • replaced “determine the partnership” with “end the partnership”
  • replaced “on giving notice” with “by giving notice”
  • removed “his or her” construction
  • removed “shall”.
Revision power: section 31(2)(e)
57 Partnership that continues after end of fixed term 30 Plain language:
  • heading rewritten to better reflect clause content
  • replaced “expired/expiration” with “ended/end”
  • replaced “so far as” with “to the extent that”
  • replaced “incidents” with “features”
  • replaced “continuance” with “continued”
  • removed “therein”
  • replaced “or such of them as” with “or by those partners who”
  • split into subclauses.
Revision power: section 31(2)(e)
58 Duty of partners to provide accounts and full information on things affecting partnership 31 Plain language:
  • removed “etc” and extended heading to provide a fuller summary of the clause
  • removed “him or her” construction
  • replaced “are bound” with “must”
  • replaced “render” with “provide”.
Revision power: section 31(2)(e)
59 Accountability of partners for private profits 32 Plain language:
  • replaced “derive” with “obtain”
  • removed “his or her” construction
  • replaced “thereof” with “of the partnership”
  • replaced “representatives” with “personal representatives” (see note under clause 42 above).
  • restructure into paragraphs.
Revision power: section 31(2)(e)
60 Duty to account for profits of competing business 33 Plain language:
  • heading replaced to better reflect the content of the clause
  • restructured to express in active voice.
Revision power: section 31(2)(e)

The note in the Bill explains that section 32 of the 1908 Act (now clause 59) required the partner to account to the firm. This section refers to accounting and paying over the profits. We are asking for feedback on the wording of this clause: should we, for example, simply omit the phrase “and pay to the firm” for consistency with other clauses?

Revision power: section 31(2)(e)
61 Rights of assignee of share in partnership 34 Plain language:
  • section 34(1) has been rewritten as subclauses (1) to (4) and section 34(2) as subclause (5)
  • removed “his or her” construction
  • replaced “during the continuance of the partnership” with “while the partnership continues”
  • replaced “the partnership books” with the “partnership [accounting?] records”. See the note in the Bill under clause 54 about how best to update references to “books”.
Revision power: section 31(2)(e)
62 Definitions of terms used in this subpart 34D For accuracy, the reference to section 5 of the Financial Reporting Act 2013 has been changed to section 5(1).

The definitions of terms were inserted in the 1908 Act on 1 April 2014 by section 110 of the Financial Reporting (Amendments to Other Enactments) Act 2013 and do not need to be amended.

Revision power: section 31(2)(e)
63 Accounting records 34B No change as 1908 Act updated on 1 April 2014.
64 Financial statements must be prepared 34C No change as 1908 Act updated on 1 April 2014.
65 Financial statements must be audited 34E No change as 1908 Act updated on 1 April 2014.
66 Audit must comply with auditing and assurance standards 34F Plain language: heading revised to be shorter and clearer.

No change as 1908 Act updated on 1 April 2014.

Revision power: section 31(2)(e)
67 Financial reporting offences 34G Slight restructuring to merge subsections (1) and (2), and to reverse the order of subsections (1) and (2).  Cross-references updated, and an unnecessary internal cross-reference deleted, but otherwise unchanged as 1908 Act was updated on 1 April 2014.

Revision power: section 31(2)(e)
68 Partnerships may opt out of audit requirement 34H Plain language:
  • divided subsection (2) into subclauses (3) and (4)
  • in subsection (1), replaced “partnership” with “large partnership” to align with clause 65, to which it refers.
Revision power: section 31(2)(e)
69 Duties do not apply if alternative financial reporting duties under Financial Markets Conduct Act 2013 34A Plain language:
  • rewritten heading to be more precise
  • updated cross-reference
Removed reference to section 55 of the Financial Reporting Act 2013 as it applies to accounting periods that started before 1 December 2016 so will not apply to this Bill.  See the note in the Bill. Revision power: section 31(2)(e)
70 Partnership dissolved at end of term, by end of venture or undertaking, or by notice 35 Plain language:
  • revised heading to provide more complete summary of clause
  • replaced “expiration” / “termination” with “end”
  • “subject to” reference in subsection (1) moved to new subclause (2) as per current drafting practice
  • removed “his or her” construction
  • replaced “last-mentioned” with reference to specific subsection
  • replaced “adventure” with “venture”
  • replaced “mentioned” with “stated”.
A note in the Bill draws your attention to an unusual and rather vague phrase in subsection (2) “date of the communication of the notice”.  We have used the phrase “the date on which the notice is received by the …”.

Revision power: section 31(2)(e)
71 Partnership dissolved by death or bankruptcy 36(1) Plain language:
  • section 36 has been restructured as clauses 71 and 72
  • “subject to” moved to subclause (2) as per current drafting practice
  • replaced “as regards” with “with respect to”.
Revision power: section 31(2)(e)

A note in the Bill questions whether this clause should be extended to include liquidation of a body corporate as a minor amendment to clarify Parliament’s intent.

Revision power: section 31(2)(i)
72 Partnership may be dissolved if partner’s interest in property is charged 36(2) Plain language:
  • refers readers to clause 44, which covers charging partner’s interest on a separate judgment debt
  • restructured in 2 subclauses
  • replaced “suffer” with “allows”
  • omitted unnecessary words “at the option”.
Revision power: section 31(2)(e)

A note in the Bill explains how we have aligned references to the partner’s “share” in section 36(2) of the 1908 Act with charging the partner’s “interest” in section 26.

In a note under subclause (2) we have explained that subject experts believe that it was intended that partners must all agree to dissolve their partnership. We have made this change to clarify Parliament’s intent under the revision power in section 31(2)(i).
73 Partnership dissolved if unlawful 37 Plain language:
  • heading rewritten
  • used paragraphs to clarify the meaning
  • replaced “happening” with “occurs”.
Revision power: section 31(2)(e)
74 Court may dissolve partnership 38 Section 38 has been restructured as clauses 74 and 75.

Revision power: section 31(2)(e)

Notes in the Bill alert you to a number of the more significant changes and potential changes that go beyond applying plain language and current drafting style.

We have:
  • omitted from paragraph (a) a potentially unnecessary reference to being found to be mentally disordered “by inquisition”. Should we go further in updating the terminology in this paragraph? For example, should it be aligned with the wording in section 14(1)(a) of the Senior Courts Act 2016?
  • aligned references to consistently refer to a partnership agreement, as used in the Limited Partnerships Act 2008 (see section 9).
75 Application to court 38(a) Plain language: replaced “person having title to intervene” with “a person who is entitled to intervene”.

Revision power: section 31(2)(e)

A note in the Bill explains that we reviewed the references to a committee making an application to declare a partnership dissolved and now refer to the Protection of Personal and Property Rights Act 1988.  We have made this change to clarify Parliament’s intent under the revision power in section 31(2)(i).
76 Right to notify dissolution 40 Plain language:
  • rewritten the section and updated a number of antiquated terms
  • replaced “the same” with “that fact”
  • removed “his or her” construction
  • replaced “retirement” with “leaves the firm” (see also note under clause 34)
  • replaced “to concur for that purpose in all necessary or proper acts” and “concurrence” on the grounds that the proposed wording “consent to, or otherwise co-operate in the performance of” and “consent or co-operation” can be considered minor amendments to clarify Parliament’s intent under the revision power in section 31(2)(i). See the note in the Bill.
Revision power: section 31(2)(e)
77 Continuing authority of partners for purposes of winding up and completing transactions 41 Plain language:
  • rewritten the section in 5 subclauses
  • expanded the heading to be more informative
  • replaced “notwithstanding” with “despite”
  • aligned the references in this section and section 42 to refer to the “affairs of the partnership”
  • removed “himself or herself” construction
  • replaced “suffered” with “allowed”
A note to subclause (4) refers to Webb’s comment that a company (or other body corporate) can enter into a partnership.  We ask whether the subclause should be extended to cover the liquidation of a body corporate as a minor amendment to clarify Parliament’s intent under the revision power in section 31(2)(i)

In the note to subclause 5, we ask how “after the bankruptcy” is best interpreted (see also the note under clause 18). Revision power: section 31(2)(e)
78 Application of partnership property 42 Plain language:
  • restructured the section into 2 subclauses
  • replaced “termination of the partnership” with “dissolution of the partnership” for consistency. In a note in the Bill, we ask for your feedback on this approach and whether you think there is any substantive difference between the 2 terms
  • aligned the references in this section and section 41 to refer to the “affairs of the partnership”.
Revision power: section 31(2)(e)
79 Court may order repayment of premium if partnership prematurely dissolved 43 Plain language:
  • heading rewritten to make it clearer that it is the court that can order the repayment of a premium
  • restructured the section into 4 subclauses with paragraphs
  • replaced “expiration” with “end”
  • replaced “otherwise than …” with “except if it is …”
  • removed “thereof”
  • replaced “has continued” with “lasted”
  • replaced “wholly or chiefly” with “entirely or mainly”.
Revision power: section 31(2)(e)
80 Rights where partnership dissolved for fraud or misrepresentation 44 Plain language:
  • replaced “partnership contract” with “partnership agreement”
  • some restructuring of paragraph (a)
  • removed “him or her” construction
Revision power: section 31(2)(e)

A note in the Bill details the inconsistent references in the 1908 Act to debts and liabilities, eg “partnership liabilities’, “debts and liabilities of the firm”, (see also sections 12, 42, and 44). We ask for your feedback on whether you think the differences were intentional or whether it is better to align them.

Note: Section 44 of the 1908 Act arguably does not align well with the Contractual Remedies Act 1979 (now in subpart 3 of Part 2 of the Contract and Commercial Law Act 2017). In the Bill, we ask for your views on whether we can deal with the difficulty in this revision Bill as a minor issue to clarify Parliament’s intent, or if it will need to be included in a future reform Bill.

See Part 4: Issues noted for possible future reform
81 Right of outgoing partner or partner’s estate to share profits or obtain interest 45(1) Plain language:
  • restructured section 45 as clauses 81 and 82
  • restructured section 45(1) as 3 subclauses
  • removed his/her and himself/herself constructions
  • replaced “per annum” with “per year”.
Revision power: section 31(2)(e)

Clause 81(2)(b) continues the interest rate at 5%. In the Bill, we explain that an interest rate is often linked to a movable rate.  We have considered whether to amend the reference to apply a calculation under the Interest on Money Claims Act 2016. Let us know if you support this change and, if so, whether you think it is a minor amendment that can be dealt with as a revision power under section 31(2)(i) or if it is better to deal with it in a future reform Bill.

See Part 4: Issues noted for possible future reform
82 Option to purchase share of outgoing or deceased partner 45(2) Plain language:
  • restructured section 45 as clauses 81 and 82
  • restructured section 45(2) as 2 subclauses
  • removed his/her, he/she and himself/herself constructions
  • replaced “assuming to act in exercise of” with “purporting to exercise”
  • replaced “thereof” with “the option”
  • removed “foregoing”.
Revision power: section 31(2)(e)

A note in the Bill asks for feedback ab whether we should retain the wording of section 45(2) and refer only to profits, or include interest (under section 45(1)) as a minor amendment to clarify Parliament’s intent under section 31(2)(i).
83 Retiring or deceased partner’s share is debt 46 Plain language: restructured section 46 as 2 subclauses.

Revision power: section 31(2)(e)

See note under clause 42 about the change from “representatives“ to “personal representatives”.
84 Rules for distributing assets on final settlement of accounts 47 Plain language: restructured section 47 as clauses 84 to 86.

Revision power: section 31(2)(e)
85 Losses 47(a) Plain language:
  • replaced “shall” with must”
  • restructured as paragraphs.
Revision power: section 31(2)(e)
86 Application of assets 47(b) Plain language:
  • replaced “shall” with “must”
  • replaced “therein” with “in the firm”
  • added brackets to the phrase “as distinguished from capital”
  • replaced “the ultimate residue” with “the remainder”
  • replaced “the proportion in which profits are divisible” with “the proportion in which they are entitled to share the profits” to align the wording with clause 85 (section 47(a)).
Revision power: section 31(2)(e)
87 Partnership Act 1908 repealed n/a  
88 Amendments to other enactments n/a  
Schedule 1 Clause 3 Transitional, savings, and related provisions (clause 6) Schedule 1 clause 3 (Savings for rules of equity and common law) 3 Plain language: minor grammatical changes.

Revision power: section 31(2)(e)
Schedule 2 Intended changes to effect of law (clause 4(2)) n/a  
Schedule 3 Comparative table (clause 4(3)) n/a  
Schedule 4 Consequential amendments (clause 88) n/a  

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