to each partner, the duration of the partnership which can only be formed for a fixed time, or for a definite object; the kind of business, the sum to be given annually to each partner for his private expenses, and the amount of compensation to be made to others, in case no excessive sum is received by one of them, the declaration that the partnership will submit to the judgment of arbitrators in case of dispute among the partners, and the manner in which the partnership capital shall be divided at the dissolution of partnership. No agreement can be made by the partners contradicting those included in the public deed, nor would such be admitted in evidence. All changes in the partnership deed must be executed in the same form as the deed itself. An extract of the deed of partnership must be enrolled in the register of trade, kept in each province. Partnership deeds not enrolled have no effect between the parties, though they have force in favour of third parties, who had contracted with the partnership. The extract must also be sent to the tribunal of commerce of the place where the partnership is situated, posted up in the hall, and transcribed on a register. Every transgression of such regulations is punished by fine (a). Unanimous consent necessary for the admission of new partner. Deed may stipulate for such admission. SECTION VIII. INTRODUCTION OF NEW PARTNERS. BRITISH LAW. As it is an essential principle of partnership that partners choose one another, no partner can compel the others to receive in his place a person to whom he proposes to transfer his rights. The admission of a partner at any time must be by the unanimous will of all the partners. The majority cannot compel the minority in this matter (b). The deed of partnership may stipulate that in case of death of one of the partners his heir or representative shall succeed him, but without a stipulation to that effect the executors of a deceased partner are not allowed to occupy his place (c). (a) Spanish Code, §§ 207-292. (b) Ex parte Barrow, 2 Rose, 225; 33. M'Neill v. Reid, 9 Bing. 68. (c) Pearce v. Chamberlain, 2 Ves. ships. Although no one can be introduced as a new partner without Sub-partnerthe concurrence of all the partners, this does not preclude a partner entering into a sub-partnership with a stranger (a); but though such a stranger would participate in the share of profit and loss, he would not become a partner on that account. In joint-stock companies with a capital divided in transferable In joint-stock companies shares, the power to transfer the interest in the company is shares are always presumed. FOREIGN LAWS. France. The deed of partnership may provide that in case of death of one of the partners his heir or representative shall be admitted in his stead, but in the absence of such provision the heir or representative can only demand his share of the profits on all the business done before the death of the partner (b). In companies by shares the shareholders are presumed, unless otherwise expressed in the deed, to have the right to sell their shares, and to constitute the purchasers of them members of the company (c). United States.-A partnership cannot be compelled by the act of one partner to receive a stranger into an association which is founded upon personal confidence (d). Germany. Without the consent of all the partners a partner cannot take another person into the partnership. A partner may allow another person to participate in his share, but he cannot give him any direct title to the partnership, nor entitle him to examine their books and accounts (e). Portugal.-Each partner may, without the consent of his copartners, accept as partner in his share a third party, but he cannot without such consent make him a member of the firm. The party thus interested is not bound as a partner towards the creditors of the partnership (ƒ). (a) Brown v. De Tastet, Jac. 284; Sir Charles Raym. case, 2 Rose, 255. (b) Code Napoléon, § 1868. (c) Code de Commerce, §§ 35, 36. (d) Kent's Comm., vol. iii. p. 60. (f) Portuguese Code, §§ 586-590. transferable. Effect of clause sion of a new partner in case for the admis of death. Admission of new partner must be by unanimous consent. Sub-partner not entitled to the same rights as partner. All partners entitled to management. Majority rule the minority. No change in essential conditions except by all the partners. SECTION IX. MANAGEMENT OF THE PARTNERSHIP. BRITISH LAW. All the partners have equal rights and equal duties to perform in the management of the partnership, and in the absence of special agreement each partner has an equal deliberative voice in all the affairs of the concern, and has a right to be consulted respecting them. No partner can be deprived of this right unless he himself has renounced it in favour of others (a). All questions relating to the administration of the partnership, and unprovided for by the articles of partnership, are subject to the decision of the majority of partners, and the majority, acting fairly and bond fide, have a right to conduct the business notwithstanding the dissent of the minority. No change, however, can be made in the essential conditions of the partnership except by the unanimous consent of all the partners. So it would not be competent for the majority in a company constituted to construct a railway between two places to decide to make a railway between two other places, or for the majority in a company constituted for fire and life insurance to undertake marine risks also; nor is it competent for the majority in case of dispute to give the choice to the dissentient party to accept or retire (b). FOREIGN LAWS. France. Every partner has an equal right to the administration of partnership affairs, and he cannot be deprived of this right unless he himself wishes to entrust it to others in his stead. Every partner has a deliberative voice. The votes are taken by head and not in proportion to the property invested, and the majority will bind the minority. But this power of the majority extends only to administrative questions. The majority (a) Domat's Civil Law, 1. 1, tit. viii. 6; Oldaker v. Lavender, 6 Sim. 239; Code Napoléon, § 1859. (b) Bagshaw v. The East Union Railway Company, 9 Hare, 326; Bugon v. Metropolitan Saloon Omnibus Com pany, 3 De Gex & J. 123; Australia Auxiliary Steam Clipper Company v. Mounsey, 4 K. & J. 733; Natusch v. Irving, Gow on Partnership, App. 390. could not change the primary or constitutory basis of the partnership. There must be unanimity among all the partners, in order to change any clause of the deed which was itself the work of all the parties in the transaction. In partnerships in collective name the partners often agree to entrust the whole management to one or more partners, who are called gérants. When the powers of the gérant are not determined, he may, according to the object of the partnership, purchase and sell, freight ships, insure, and do everything necessary for the existence of the partnership; but he cannot go beyond his administrative capacity. Thus, in a manufacture, the gérant might purchase merchandise, and sign bills for them. He might sell the manufactured articles, and even the raw material purchased to manufacture them, because in some cases the same may be resold for a profit; and he has the right to recover the sums due to the partnership. But the sale, without the authority of his copartners, of the house and warehouses where the trade or manufacture is carried on, would be null as regards third parties, who can never think that his powers extend to the sale of the establishment itself. It would be the same as regards the mortgage of real estates belonging to the partnership, though the gérant would not violate this rule by selling an estate which was purchased for the purpose of resale. The gérant could not alone consent to a cession of all partnership property in favour of its creditors. And as the gérant can only bind the partnership in virtue of the powers conferred upon him, it follows that he can bind the partnership towards third persons only for what he has done in his capacity of gérant; though third parties would be bound for their engagements towards the partnership. The gérant properly stands in the capacity of agent for the partnership. A partner expressly nominated as gérant cannot substitute another in his stead without the formal consent of all the partners. Where a gérant has been appointed, the copartners have no right to interfere in the management. They have only a right to watch over the gérants, and to inspect the books (a). ners have Germany. The management of the partnership may be con- All the part fined by the deed to one or more partners; and if one or more (a) Pardessus, Droit Commercial, tom. iii., § 1013. VOL. I. F management. equal right of partners have been appointed for the purpose, they cannot be deprived of their special right without a rightful cause. Where no one is specially appointed, all the partners have equal right to carry on the business of the partnership. For anything which is not within the limits of the partnership the consent of all the partners must be obtained. Unanimity is also required in the appointment of the gérant, or managing partner (a). Authority of managing partner. Rights of copartners restricted when manag ing partners are appointed. Portugal-Every partner is held to be a managing partner unless otherwise provided for by the deed. When in conformity with the deed the partners have confided to one of themselves the management of the partnership, they are at liberty to extend or restrict his authority. The managing partner may do all that belongs to the administration of the partnership notwithstanding the opposition of other partners. But if the managing partner abuses his authority, the other partners may nominate another to inspect his management, or demand a dissolution of the partnership (b). Spain. Unless otherwise provided, all the partners have the right to concur in the general administration of the partnership. When some of the partners have been specially entrusted with the management of the partnership, those who do not possess such authority cannot counteract their orders or interfere with their management. The management of the business cannot be withdrawn from the partners appointed by the deed, except upon a valid cause (c). Capital stock absolute property of all the partners. What is capital stock. SECTION X. INTEREST OF PARTNER IN THE CAPITAL STOCK. BRITISH LAW. Whatever is brought by each partner into the joint stock must be brought absolutely and unconditionally, and not as a loan or for the temporary use of the partnership. The partnership property consists of the original stock, whether personal or real property, or both; and of all the additions made to it in (a) German Code, $$ 99-104. (c) Spanish Code, §§ 304-307. |