Associate Finance Minister David Parker has introduced the Partnership Law Bill to Parliament.
The Bill is a revision bill prepared under subpart 3 of Part 2 of the Legislation Act 2012.
Its purpose is to re-enact, in an up-to-date and accessible form the Partnership Act 1908, which contains rules that govern business partnerships, for example the rights and obligations of partners to each other and to third parties.
By restating the rules in plain language, the bill makes them easier to understand and apply. For example, references to “a partner who retires” which has been interpreted as including partners who have been expelled or “compulsorily retired”’ have been replaced with references to “leaving the firm.”
Archaic terminology has been updated (for example, “thereto”, “therein”, “thereby”, and “thereof”). In addition, the reference to “servant” in section 5(c)(ii) of the 1908 Act has been updated to “employee” in clause 15(1)(b).
The bill commences six months after Royal assent.
Part 1 is the purpose, overview and other preliminary provisions.
Part 2 (Nature of partnership) clauses 8 to 10 has the subheading Meaning of partnership and firm name and clauses 11 to 16 Determining whether a partnership exist.
Part 3 (Relationship of partners to third persons and to each other) is divided into Subpart 1 – Relationship of partners to third persons and Subpart 2 – Relationship of partners to one another.
Part 4 (Financial reporting, dissolution of partnership, and other miscellaneous provisions) is divided into Subpart 1 – Financial reporting for large partnerships, Subpart 2 - End of partnership with subheadings How a partnership may end and Dissolving a partnership and Subpart 3 – Repeal and consequential amendments.
Schedule 3 is a comparative table which sets out where the corresponding provisions of the Partnership Act can be found in the Act on its commencement.