Stumbles Legal

Directors and shareholders of companies sometimes call themselves “business partners” but of course they are not “partners” in the true sense, and the Act does not apply to people carrying on business through a company.  (The Commonwealth Corporations Act 2001 applies to companies).  That being said, it is possible to have a partnership where one or more (or all) of the partners are companies (or trusts for that matter). 

 

Variation by consent of terms of partnership

 

The mutual rights and duties of partners (as between themselves) defined by the Act may be varied by the consent of all the partners, and such consent may be either express or inferred from a course of dealing (but of course it is advisable to have the variation recorded in writing and signed by all parties in a suitably worded agreement).

 

Terms that cannot be varied

 

The Act also contains provisions which give rights to third parties, and which cannot be varied by the partners.  For example, the Act gives third parties the right to assume, in certain circumstances, that the partner they are dealing with has authority to represent and bind the partnership (and all the partners).  Further, the Act makes all partners liable for the debts and obligations of the partnership in certain circumstances.

​

For more information on the effect of the Partnership Act 1958 (Vic) and on the importance of partnership agreements, see:

​

• Partnerships (and the Importance of Partnership Agreements)

​

• Partners as Agents of Other Partners

​

• Liability of Partners

​

• Implied Terms of Partnership Agreement

​

• Partnership - Expulsion, Retirement and Continuance

​

• Dissolution of Partnership

​

See also our articles on structuring and other aspects of business relationships.

​