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Alex J.
Alex J., Solicitor
Category: Law
Satisfied Customers: 3519
Experience:  Solicitors 2 years plus PQE
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We are a Partnership under Scottish Law, consisting of two

Resolved Question:

We are a Partnership under Scottish Law, consisting of two full partners and 1 investor who entered as a so-called silent partner with no other purpose as to invest funds into the Firm and receive interest in return.
The Firm's Bank (Lloyds Bank) however considers him to be a full partner, even though he never signed along on the Partnership Agreement.
Is this legally correct? Kind regards, ***** *****
Submitted: 1 year ago.
Category: Law
Expert:  Alex J. replied 1 year ago.
Hi,
Thank you for your question and welcome.
My name is ***** ***** I will assist you.
The bank is correct, even if the partner does not sign up to the Partnership Agreement he is still a partner, on the grounds that he has contributed to the capital, and is participating in a return and presumably is liable for the partnership debts. In Scotland all partners have joint and several liability.
If you want to move away from a suggestion that he is a partner, you should restructure his investment as a loan and have a loan document to support this as evidence to give to the bank.
I look forward to hearing from you.
Kind regards
AJ
Customer: replied 1 year ago.

Thank you Alex, very helpful information.

But what to do with the fact that the Bank actually pressurised this person into becoming a partner without explaining the consequences to him or offer alternatives? Again, the Bank made it a precondition for the loan to be approved.

Kind regards,

Johannes

Expert:  Alex J. replied 1 year ago.
Hi,
Thank you.
Did the bank at any time suggest that this individual should obtain independent advice?
If you look at S.9 of the Partnership Act 1890 - any solicitor would have advised him that under Scottish Law he was becoming jointly and severally liable.
If the bank pressurised and told him not to get advice he should consider making a formal complaintand/or complaining to the FOS www.financial-ombudsman.org.uk/contact/index.html
I look forward to hearing from you.
Kind regards
AJ
Alex J., Solicitor
Category: Law
Satisfied Customers: 3519
Experience: Solicitors 2 years plus PQE
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