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Assignment 1

Law 612 A
Q1. Aung Aung, Ye Lay and Zaw Zaw have gone into partnership.
Theirpartnership agreement said that the firm could only beterminated by the
partners themselves if two of the threepartners agree to this. Would this agreement
be givenlegal effect, or could one of the partners terminate thepartnership by
giving notice under the Partnership Act? Discuss with the relevant provisions and
cases.
This agreement would be given legal effect.
The Essential Elements of a Partnership
The definition of "Partnership" under section 4 The Partnership Act, 1932, contains
the essential element of the relationship of Partnership as follow: -
(1) There must be an agreement between two or more persons.
(2) The agreement must be with the intention to form a partnership business and to
share the profits of that business.
(3) The business must be carried on by all or any of them acting for all.
The Partnership Act of 1932,
Section 11,
(1) Subject to the provisions of this Act, the mutual rights, and duties of the
partners of a firm may be determined by contract between the partners, and such
contract may be expressed or may be implied by a course of dealing.
Such contract may be varied by consent of all the partners, and such consent may
be expressed or may be implied by a course of dealing.
A business without agreement, whether intends to do partnership or not, must be
assumed by the conduct of persons, which was decided in the case of "Koo Gyee Hoke
and six others vs. Wee Tin Shan and four others". In this case a partnership firm by the
name of "Sin Eng Choon" was established some 70 years of age. There were only two
partners called "Koo Ban Pan" and "Wee Po Ee". Wee Po Ee died in 1892 and Koo Ban
Pan's conduct since the time of Wee Po Ee's death had all along been in the nature of a
sole proprietorship. But Daw Khet, wife of Wee Po Ee enjoyed a defined share of the
profits of the business of Sin Eng Choon. Section 42 provides that unless there is no
contrary term, a partnership firm formed only two persons is dissolved when a partner
dies. Daw Khet even enjoyed a defined share of the profits of that business there was no
Law 612 A, Law of Business Organisations
testimony regarding the agreement between DawKhet and Koo Ban Pan since Wee Po Ee
died. Therefore, in the absence of any testimony regarding property of the firm, it cannot
be said that Daw Khet became a partner. After the death of Daw Khet, her son, plaintiff
Wee Tin Shan never became a partner and he has no right to sue as a partner, because
there was no testimony that he was a partner in the business.
In "Dawood Sahib vs. Sheik Mohideen" case, there were two persons, "A" and
"B" agreed to form a partnership firm and to share to profits of continued that business as
his father was alive. But there was no express agreement between "C" and "B" which
made no objection for "C’s entrance. The Court held that "C" was entitled to get share
profits as when his father was alive.
Therefore, it can be seen that if there is no agreement either in writing or oral or
by the conduct of the parties to enter into a partnership business, they cannot be held as
partners.
One of the partners could not terminate the partnership by giving notice under the
Partnership Act because the partnership agreement said that the firm could only be
terminated by the partners themselves if two of the three partners agree to this.
Modes of Dissolution of a Firm
In Myanmar, there are five different modes of the dissolution of a firm:-
dissolution by agreement,
compulsory dissolution,
dissolution on the happening of certain contingencies,
dissolution by notice of a partnership at will, and
dissolution by court.
Dissolution by Agreement
A firm may be dissolved with the consent of all the partners or in accordance
with a contract between the partners. (Section 40 of the Partnership Act 1932)

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