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JGM
JGM, Solicitor
Category: Scots Law
Satisfied Customers: 11154
Experience:  30 years as a practising solicitor.
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Good morning Briefly,my brother and I were in partnership

Resolved Question:

Good morning
Briefly,my brother and I were in partnership until 3years ago and accumulated quite a bit of debt.We were using our fathers house as a business address,he had retired in 1995 with ill health.A supplier is claiming that my father is a partner as he had signed a few delivery notes and is using an act of 1890 in pursual,we live in Scotland .Do you need more information
p.s The business stopped trading but no bankruptcy proceedings
Submitted: 3 years ago.
Category: Scots Law
Expert:  JGM replied 3 years ago.
Thank you for your question.

If your father wasn't a partner in the business then he is not responsible for the debts of the partnership. The Partnership Act 1890 lays down rules for determining whether there is a partnership or not:

"2. † Rules for determining existence of partnership.
In determining whether a partnership does or does not exist, regard shall be had to the following
rules:
(1)† Joint tenancy, tenancy in common, joint property, common property, or part ownership does
not of itself create a partnership as to anything so held or owned, whether the tenants or owners do
or do not share any profits made by the use thereof.
(2)† The sharing of gross returns does not of itself create a partnership, whether the persons sharing
such returns have or have not a joint or common right or interest in any property from which or
from the use of which the returns are derived.
(3)† The receipt by a person of a share of the profits of a business is prim‚ facie evidence that he
is a partner in the business, but the receipt of such a share, or of a payment contingent on or varying
with the profits of a business, does not of itself make him a partner in the business; and in particular:

Page 2
(a) † The receipt by a person of a debt or other liquidated amount by instalments or otherwise
out of the accruing profits of a business does not of itself make him a partner in the business
or liable as such:
(b) † A contract for the remuneration of a servant or agent of a person engaged in a business
by a share of the profits of the business does not of itself make the servant or agent a partner
in the business or liable as such:
(c) † A person being the widow [, widower, surviving civil partner] 2 or child of a deceased
partner, and receiving by way of annuity a portion of the profits made in the business in
which the deceased person was a partner, is not by reason only of such receipt a partner in
the business or liable as such:
(d) † The advance of money by way of loan to a person engaged or about to engage in any
business on a contract with that person that the lender shall receive a rate of interest varying
with the profits, or shall receive a share of the profits arising from carrying on the business,
does not of itself make the lender a partner with the person or persons carrying on the
business or liable as such.
Provided that the contract is in writing, and signed by or on behalf of all the parties
thereto:
(e) † A person receiving by way of annuity or otherwise a portion of the profits of a business
in consideration of the sale by him of the goodwill of the business is not by reason only of
such receipt a partner in the business or liable as such."

Nothing you have said in your narrative would lead anyone to conclude that your father was a partner. Certainly signing for deliveries and giving you the use of his property does not.

Happy to discuss further.

I hope this helps. Please leave a positive response so that I am credited for my time.
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