ARTICLES OF PARTNERSHIP
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ARTICLES OF PARTNERSHIPARTICLES OF PARTNERSHIP. The name given to an instrument of writing by which
the parties enter into a partnership, upon the conditions therein mentioned.This instrument generally contains certain provisions which it is the objecthere to point out. 2. But
before proceeding more particularly to the consideration of theSubject, it will be proper to observe that sometimes preliminary agreementsto enter into a partnership are formed,
and that questions, notunfrequently, arise as to their effects. These are not partnerships, butagreements to enter into partnership at a future time. When such anagreement
has been broken, the parties may apply for redress to a court oflaw, where damages will be given, as a compensation. Application issometimes made to courts of equity for
their more efficient aid to compel aspecific performance. In general these courts will not entertain bills forspecific performance of such preliminary contracts; but in order to
suppressfrauds, or manifestly mischievous consequences, they will compel suchperformance. 3 Atk. 383; Colly. Partn. B. 2, c. 2, Sec. 2 Wats. Partn. 60;Gow, Partn. 109;
Story, Eq. Jur. Sec. 666, note; Story, Partn. Sec. 189; 1Swanst. R. 513, note. When, however, the partnership may be immediatelydissolved, it seems the contract cannot be
specifically enforced. 9 Ves.360. 3. It is proper to premise that under each particular head, it isintended briefly to examine the decisions which have been made in relationto
it. 4. The principal parts of articles of partnership are here enumerated.1. The names of the contracting parties. These should all be severally setout. 5.-2. The agreement
that the parties actually by the instrument enterinto partnership, and care must be taken to distinguish this agreement froma covenant to enter into partnership at a future time.
6.-3. The commencement of the partnership. This ought always to beexpressly provided for. When no other time is fixed by it, the commencementwill take place from the
date of the instrument. Colly. Partn. 140 5 Barn. &Cres. 108. 7.-4. The duration of the partnership. This may be. for life, or fora, specific period of time; partnerships may be
conditional or indefinite intheir duration, or for a single adventure or dealing; this period ofduration is either express or implied, but it will not be presumed to bebeyond life. 1
Swanst. R. 521. When a term is fixed, it is presumed toendure until that period has elapsed; and, when no term is fixed, for thelife of the parties, unless sooner dissolved by
the acts of one of them, bymutual consent, or operation of law. Story, Part. Sec. 84. 8. A stipulation may lawfully be introduced for the continuance of thepartnership after
the death of one of the parties, either by his executorsor administrators, or for the admission of one or more of his children intothe concern. Colly. Partn. 147; 9 Ves. 500.
Sometimes this clause provides,that the interest of the partner shall go to such persons, as be shall byhis last will name and appoint, and for want of appointment to such
personsas are there named. In these cases it seems that the executors oradministrators have an option to continue the partnership or not. Colly.Partn. 149; 1 McCl. & Yo.
569; Colles, Parl. Rep. 157. 9. when the duration of the partnership has been fixed by the articles,and the partnership expires by mere effluxion of time, and, after
suchdetermination it is carried on by the partners without any new agreement, inthe absence of all circumstances which may lead as to the true intent of thepartners, the
partnership will not, in general, be deemed one for a definiteperiod; 17 Ves. 298; but in other respects, the old articles of the expiredpartnership are to be deemed adopted, by
implication as the basis of the newpartnership during its continuance. 5 Mason, R. 176, 185; 15 Ves. 218; 1Molloy, R. 466. 10.-5. The business to be carried on and the
place where it is to beconducted. This clause ought to be very particularly written, as courts ofequity will grant an injunction when one or more of the partners attempt,against
the wishes of one or more of them, to extend such business beyondthe provision contained in the articles. Story, Partn. Sec. 193; Gow, Partn398. 11 - 6. The name of the
firm, as for example, John Doe and Company,ought to be ascertained. The members of the partnership are required to usethe name thus agreed upon, and a departure from it
will make themindividually liable to third persons or to their partners, in particularcases. Colly. Partn. 141; 2 Jac. & Walk. 266; 9 Adol. & Ellis, 314; 11 Adol.& Ellis, 339; Story,
Partn. Sec. 102, 136, 142, 202. 12.-7. A provision is not unfrequently inserted that the business shallbe managed and administered by a particular partner, or that one of
itsdepartments shall be under his special care. In this case, courts of equitywill protect such partner in his rights. Story, Partn. Sec. 172, 182, 193,202, 204 Colly. Partn. 753.
In Louisiana, this provision is incorporated init's civil code, art. 2838 to art. 2840. The French and civil law also agreeas to this provision. Poth. de Societe, n. 71; Dig. 14, 1, 1,
13; Poth.Pand. 14, 1, 4. 13. Sometimes a provision is introduced that a majority of the partnersshall have the management of the affairs of the partnership. This isrequisite,
particularly when the associates are numerous, As to the rightsof the majority, see Partners. 14.-8. A provision should be inserted as to the manner of furnishingthe capital
or stock of the partnership. When a partner is required tofurnish his proportion of the stock at stated periods, or pay byinstallments, he will, where there are no stipulations to
the contrary, beconsidered a debtor to the firm. Colly. Partn. 141; Story, Partn. Sec. 203;1 Swanst. R. 89, Sometimes a provision is inserted that real estate, andfixtures
belonging to the firm shall be considered, as between the partners,not as partnership but as several property. In cases of bankruptcy thisproperty will be treated as the
separate property of the partners. Colly.Partn. 141, 595, 600; 5 Ves. 189; 3 Madd. R. 63. 15.-9. A provision for the apportionment of the profits a and lossesamong the
partners should be introduced. In the absence of all proof, andcontrolling circumstances, the partners are to share in both equally,although one may have furnished all the
capital, and the other only hisskill, Wats. Partn. 59; Colly. Partn. 105; Story, Partn. Sec. 24; 3 Kent,Com. 28; 4th ed.; 6 Wend. R. 263; but see 7 Bligh, R. 432; 5 Wils. &
Shaw,16. 16.-10. Sometimes a stipulation for an annual account of the Propertyof the partnership whether in possession or in action, and of the debts dueby partnership is
inserted. These accounts when settled are at least primafacie evidence of the facts they contain. Colly. Partn. 146 Story Partn.Sec. 206; 7 Sim. R. 239. 17.-11. A provision
is frequently introduced forbidding any onepartner to carry on any other business. This should be provided for, thoughthere is an implied provision in every partnership that no
partner shallcarry. on any separate business inconsistent or contrary to the trueinterest of the partnership. Story, Partn. Sec. 178, 179, 209. 18.- 12. When the partners are
numerous, a provision is often made forthe expulsion of a partner for gross misconduct, for insolvency, bankruptcy,or other causes particularly enumerated. This provision will
govern when thecase occurs. 19.-13. This instrument should always contain a provision for windingup the business. This is generally provided for in one of three modes:first,
by turning all the assets into cash, and, after paying all theliabilities of the partnership, dividing such money in proportion to theseveral interests of the parties; secondly, by
providing that one or more ofthe partners shall be entitled to purchase the shares of the others at avaluation; thirdly, that all the property of partnership shall be appraised,and
that after paying the partnership debts, it shall be divided in theproper proportions. The first of these modes is adopted by courts of equityin the absence of express
stipulations. Colly. Partn. 145 Story, Partn. Sec.207 8 Sim. R. 529. 20.-14. It is not unusual to insert in these articles, a provisionthat in case of disputes the matter shall be
submitted to arbitration. Thisclause seems nugatory, for no action will lie for a breach of it, as thatwould deprive the courts of their jurisdiction, which the parties cannot
do.Story, Partn. Sec. 215; Gow, Partn. 72; Colly. Partn, 165 Wats. Partn. 383. 21.-15. The articles should be dated, and executed by the parties. Itis not requisite that the
instrument, should be under seal. Vide Parties tocontracts; Partners Partnership.
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