Ask a Law Question, Get an Answer ASAP!
Hello, my name is Jim and I am a qualified lawyer happy to help you today.
As there is no partnership agreement in place, implied terms of the partnership are then imposed by statute under the Partnership Act 1890.
What this means is that in the absence of anything written, you share 50% of the profits and are also jointly liable for any debts. It means if one of you wants to leave the partnership, you can do so and that then dissolves the partnership automatically. You are then both left with having to tie up loose ends of the business which means settling any debts, taxes, wages, and so on.
Unfortunately as there is nothing written then there is nothing to stop either of you from setting up in another business once you leave the partnership. That is why it is very important to have a written partnership agreement with restraint of trade clauses and so on to protect the business if someone leaves.
I hope this helps - if you can please accept the answer and give me a 5 star rating (the top right of your screen & then click “submit”), I can answer follow up Q&A's at no extra charge and I will be credited for helping you today.
I hope I have helped.
Before you go please don't forget to rate the answer by clicking the 5 stars on screen and clicking “submit”.