By Funmilayo Olagunju
Black’s Law Dictionary 8th Edition, defines “partnership” as a voluntary association of two or more persons who jointly own and carry on a business for profit.
A joint venture akin to partnership is a business undertaking by two or more persons engaged in a single defined project. The essential ingredients are:
(a) express or implied agreement
(b) a common purpose
(c) shared profit and losses
(d) each member enjoy equal voice in controlling the project.
Where partnership is for a period undefined, any of the parties can give notice or approach the Court for the dissolution of the partnership provided the right is exercised bonafide, not for the purpose of taking undue advantage of the business of the partnership. Whether such dissolution is by reason of the state of agreement of the partnership or by Court decree each party is entitled to be indemnified to the tune of expenses he had rightfully incurred on behalf of the partnership in the ordinary course of its business or for the preservation of the partnership. Then again every partner is in law jointly and severally liable with other co-partners for all debts and liabilities of the partnership. Consequently, I will add, each member unless there is a formal agreement stating otherwise, will be entitled equally to the sharing of both the physical or liquid assets of the partnership.
See the case of OKIN & ANOR v. OKIN
The place of a well drafted Partnership Agreement cannot be over emphasized. Partnership agreement is a legal contract that contains the terms and conditions and detailed responsibilities of parties in the partnership. Partnership business like Sole proprietorship can also be registered with the Corporate Affairs Commission.
Be wary of venturing into partnership based on emotion alone. The cordial relationship upon which the partnership was built might be hampered by unforeseen able future difference. The presence of a mutually beneficial partnership Agreement would protect the interest of both or all partners.
“Do two walk together unless they have agreed to do so?”