TUTORIAL 1 LAW OF PARTNERSHIP

(LAW346)
NATURE & ELEMENTS OF PARTNERSHIP

1.

State briefly 3 circumstances when sharing of profits does not necessarily make a
person a partner according to section 4(c) Partnership Act 1961.
(15 marks)

2.

Discuss any three (3) essential elements of a partnership in light of section 3(1) of the
Partnership Act 1961.
(15 marks)

3.

Karim works as a valuer in the firm of 'Perkasa Real Estate'. In addition to his monthly
salary, he also receives 15% of the firm's profit annually. Is Karim a partner of the firm?
Give reasons.
(15 marks)

4.

Can there be a partnership between an adult and a minor? State the relevant section
and a case to support your answer.
(15 marks)

5.

Explain whether a minor can be a partner, and if so, whether he can be made liable for
the debts of the partnership.
(15 marks)

6.

Hoo Tang inherited a profitable stationary business and being ambitious wished to
expand it. He borrowed RM10,000 from Malang and in consideration agreed firstly, to
repay the capital sum by ten installments equalling one-third of each year's profits and
secondly, to repay Malang one-tenth of the gross returns of the business yearly for ten
years in lieu of interest on the loan. Hoo Tang expanded his business recklessly and
ran into difficulties. The business has now become insolvent and the creditors wish to
make Malang liable as a partner. Discuss.
(100 marks)

7.

Abdul, Ambo and Akoo are partners in a firm called 3A Enterprise. They have decided
to appoint Terry to help manage the business and one of the terms of the contract is
that Terry will participate in the profits of the business. Not long after appointment the
firm suffered huge losses. Terry seeks your advice as to whether he is a partner of the
firm and therefore liable as a partner.
Advice Terry.
(50 marks)

8.

Dahlia, Jasmin and Okid were partners in a business name "Bunga-Bunga Malaysia &
Associates". They agreed to share equally the profits made from the business. Three
years later, Okid died and her widower, Kumbang continued to received the profits

made from the business. With reference to the relevant provisions of the Partnership
Act 1961, consider whether Kumbang is a partner of the business.
(50 marks)
9.

Section 4 of the Partnership Act 1961 provides rules for determining the existence of a
partnership. Explain the rules.
(100 marks)

TUTORIAL 2 LAW OF PARTNERSHIP

(LAW346)
RELATIONSHIP BETWEEN PARTNER AND OUTSIDERS

1.

Section 12 of the Partnership Act 1961 provides for the liability of the firm for the
wrongs done by a partner. Explain the important elements of the section.
(15 marks)

2.

Explain the doctrine of holding out as stated in section 16 of the Partnership Act 1961.
(15 marks)

3.

Explain how a partnership can be liable for the tortious act of a partner.
(15 marks)

4.

Explain the nature of a partner's liability under section 14 of the Partnership Act 1961.
(15 marks)

5.

Briefly explain the circumstances in which a firm is made liable for the act done by a
partner based on section 12 of the Partnership Act 1961.
(15 marks)

6.

In a partnership where there is no fixed term, explain when a partner can serve his
notice of retirement on the other partners in Malaysia.
(15 marks)

7.

Distinguish between joint and several liability.

(15 marks)

8.

Briefly explain the liabilities of partners for debts and obligations of a firm as provided
under the Partnership Act 1961.
(15 marks)

9.

With reference to the Partnership Act 1961 and decided cases, discuss the liability of
incoming and outgoing partners
(40 marks)

10.

Adam, Benjy and Cindy are partners in a firm that provides office furniture known as
"Office Centre Enterprise". Adam received RM30.000 from Sura Sign Sdn. Bhd., a

client of the firm for the payment of several computer tables and filing cabinets. Without
the knowledge of the partners, Adam used the money to refurbish his house. Discuss
the liability of the partners for the misapplication of the firm's money.
(40 marks)
11.

With reference to the Partnership Act 1961 and relevant cases, explain whether a
person, who is not a partner, may be made liable for the debts of the firm.
(50 marks)

12.

Majid and Shiraz are carrying on business as theatre proprietors. The partnership deed
provided that no partner shall borrow money except with the consent of the other
partner or in the usual course of business. Majid borrowed RM5,000 from a
moneylender stating that the money was for the business of the firm. Instead, he used
the money to go for a holiday abroad. The moneylender is suing the firm for the debt.
Discuss whether the firm is liable for the debt.
(50 marks)

13.

Jane, June and Jinny are partners in a firm called "The New You" which specializes in
beauty treatment. Jinny, without Jane's and June's knowledge, borrowed RM50.000
from Sure Finance to pay off some debts of the firm and to buy a new treatment
machine. Sure Finance demanded repayment of the loan from Jane and June when
Jinny defaulted a few monthly instalments.
Discuss whether Sure Finance is likely to succeed in its action.
(40 marks)

14.

Primare and De Hul are partners in a firm manufacturing CD players. While testing
some players last month Primare forgot to install some safety devices. Thorens bought
their CD player and suffered hearing problems. De Hul borrowed some money from X
Bank in the name of the firm but used the money for his own private purpose.
Advise Thorens and X Bank whether they can sue the firm.
(100 marks)

15.

Along, Alang and Achik are partners of a firm trading under the name and style of
"Triple A Trading & Co". The firm deals with the supply of office equipment to
government departments. A clause in the partnership agreement clearly states, "No
partner shall enter into contracts amounting to more than RM150, 000 without the
consent of the other partners." On 20 May, Along entered into a contract with Jaya
Furniture Sdn. Bhd. for the supply of office cabinets, tables and chairs worth RM160,
000. On 3 July, Along entered into another contract with Leong Kang Automobile Co.
for the purchase of a second hand lorry valued at RM80, 000.
Advise Triple A Trading & Co as to its liability for the above transactions.
(100 marks)

16.

Explain the general rule on the expulsion of partners and state whether it is
possible for partners to expel a fellow partner.
(1 5 marks)

TUTORIAL 3 LAW OF PARTNERSHIP

(LAW346)
RELATIONSHIP BETWEEN PARTNERS
1.

Discuss any three (3) rights of partners as stated in Section 26 of the Partnership Act
1961.
(15 marks)

3.

State the general rule on expulsion of partners.

(15 marks)

4.

What is the general rule on the expulsion of partners and state whether it is possible for
partners to expel a fellow partner.
(15 marks)

5.

The Partnership Act 1961 stipulates that the partners of a firm are governed under
certain types of relationship. Briefly explain the fiduciary relationship of partners.
(15 marks)

6.

Explain briefly the rights of partners as provided under the Partnership Act 1961relating
to each of the following:
i)
Capital and profit of the business.
ii)
Management of the partnership business.
iii)
Remuneration.
(15 marks)

6.

Briefly discuss the law governing the following situations;

i)
The entitlement of a partner to claim any salary or remuneration for any work
he or she does for a firm, and
ii)
The right of partner to introduce or to admit a person to be a partner in a firm.
(15 arks)

7.

Lucky Enterprise is a firm that publishes books and magazines. Ah Fatt, Amirul and
Akshay are the partners of the firm. Discuss the legal position in the following
situations:
a)
Ah Fatt, without the knowledge of the other partners, had used one of the
firm's printing machines to print wedding cards. He kept the profit that he had
earned in his personal account.
(40 marks)
b)
Amirul published a defamatory article about Datuk Kaya, a local politician.
Datuk Kaya is now suing the firm for damages in the tort of defamation.
(40 marks)
c)
Akshay wishes to bring in his brother Anand to join the firm. This idea was
opposed by Amirul.
(20 marks)

8.

Karim works as a valuer in the firm of 'Perkasa Real Estate'. In addition to his monthly
salary, he also receives 15% of the firm's profit annually. Is Karim a partner of the firm?
Give reasons.
(15 marks)

9.

Discuss any three (3) rights of partners as stated in Section 26 of the Partnership Act
1961.
(15 marks)

10.

Consider the position under Partnership Act 1961 when a partner without the consent
of the other partners, carries on business of the same nature as and in competition with
his firm.
(15 marks)

11.

Abu and Ali are partners and they carried out a business selling imported fruits under
the name of Exotic Fruits Syndicate. Abu decided to form his own business and gave
notice to Ali to dissolve the partnership. Ali continued the business using the same
name as he did not want to lose his customers. He also used the old letterhead of
Exotic Fruits Syndicate to carry out the business transactions without removing Abu's
name. Ali entered into an agreement to purchase 10 boxes of apples from Ibrahim. Ali
failed to pay the price of the apples within the time stipulated for payment under the
contract. Ibrahim wants to know whether he can initiate a legal action to recover the
debt from Abu.
Advise Ibrahim.
(70 marks)

12.

The Partnership Act 1961 stipulates that the partners of a firm are governed under
certain types of relationship. Briefly explain the fiduciary relationship of partners.
(15 marks)