Starting up/joining a partnership Open Questions

- Tell me in your own words a bit about the p/ship - It wld be helpful if you cld let me know of any particular concerns you have - Formal agreement in place? Terms Oral/ or Is it in writing? has the client brought it in? - Duration? - Tell me about how the business is run? What are you hoping to achieve? - Tell me about financial position of the bus profitability + Solvency (Net assets + profits) Has the client seen the accounts? - Other partners involved? tell me something about their roles + entitlements How many others Relationship with each other + Client Voting powers any issues about being outvoted How are decisions made Salary/Share of profit + loss? Roles + goals

Closed Questions
Are you happy with current P/ship terms (or lack thereof)? If purchasing another Ps share: on what terms? Why are they leaving? What role do you hope to have in the business? What is the proposed investment + gains Clients personal financial situation How will Decisions be made + any limitations on Ps authority? Authority express and implied extremely significant in Ps Liabilities joint and several liability Existing liabilities Consider an indemnity agreement in the event of unauthorized actions of other partners Disputes How will disputes be resolved ADR provision?. future retirement? any prov. 4 getting investment back

Legal Position

P/Ship = parties carrying on a bus in common with a view to profit

LIABILITY = joint + several 4 all debts incurred: while a P: outgoing P? indemnity / Novation in course of business authorised wrongs (loss/injury/penalty) OSTENSIBLE Authority of P to bind firm (4 tests) 1) transaction - kind carried by firm 2) P usually have authority for: rd 3) wld 3 party - any reason to suspect 3) 3rd party believed they had authority? Personal liability where: not satisfied; Or partner uses credit of firm for private purpose DURATION (contract)+ TERMINATION Fixed Term P/ship ends at end of JV if continues, does so under old terms - P/ship at will: no expulsion/not free to just sell 2 outsider termination by notice dissolution restrictions on dissolution: allow remaining business to survive 1. notice (retirement/dissolution) must allow a minimum period [6] months b4 taking effect. 2. P/ship to continue 4 as long as there are at least 2 remaining Ps, despite departure of any P by reason of retirement / expulsion / death or bankruptcy = Guarantees degree of security whilst allowing individuals the flexibility of being able to leave. - ancillary Provs can be included: - Arrangement [delay] 4 purchase of outgoing Ps share - disposal of business/ goodwill RITHT TO: (subject to agmt.) - be involved in decision making - share of capital, profits and losses equally - examine accounts - insist on openness and honesty - veto new P / ch of nature of bus. - be indemnified 4 unauthorised debts / profits - no right to remuneration for acting in p/ship Implied DUTY of GOOD FAITH - openness + honesty - not to compete (must not be involved in any bus of same nature in comp account 2 bus 4 private profits made (w/out consent) from use of P name/property /connections - be indemnified 4 debts incurred w/out authority MUSTS: See accounts, obtain advice as to valuation TASKS Bankruptcy Searches / negations / drawing up Contract COSTS + TIME FRAME Contract 2hrs charged at firms hrly rate (300 + VAT) Shld you instruct us - further work keep you updated as to costs + time implications 2