Book Review: Partnership & LLP Law

Partnership & LLP Law, Geoffrey Morse and Thomas Braithwaite (9th edn, OUP 2020), 512pp., hardback, ISBN: 9780198832799. Also available as an EPUB ebook ISBN 9780192569158.

I have to confess to some nostalgic attachment to this book, which was originally aimed at undergraduate students and was first published in the year I went to university, two years before I was taught partnership law by the distinguished author, Professor Geoffrey Morse. The latest edition takes the book in a very different direction, aimed (and priced) squarely at practitioners, not students, and with the section on LLPs (which of course did not exist when the book was first written) now co-authored by barrister Thomas Braithwaite and nearly doubled in length from the previous edition. The writing style, I am pleased to report, continues to be highly accessible.

The chapter structure of the partnership section of the book, which is still its dominant part (approximately three-quarters of the text), remains the same as in the previous edition, although there are new sections on developments in Jersey (reflecting new legislation there) and the powers of the court in respect of the assets on winding up (reflecting the judgment in Campbell v Campbell). It thus covers the formation of a partnership, ‘legal controls’ such as the business names legislation and caselaw on restrictive covenants, partners’ relationships inter se and with third parties, partnership property, dissolution and winding up, and insolvency. There is a separate chapter on limited partnerships. Perhaps surprisingly given that Professor Morse is also an expert in taxation law, there is no chapter on taxation.

The contents list now includes the all the subheadings within chapters, rather than only the main ones, which is helpful in navigating the book, and there continues to be a detailed index. However, the lowest level subheadings within the chapters are no longer in italics and are therefore rather too easy to miss.

Although is only four years since the previous edition was published, the thorough updating includes an impressive number of new cases, including Hosking v Marathon Asset Management on the availability of the equitable remedy of forfeiture as applied to the share of profits of a partners or LLP member, Braganza on reasonableness in decisionmaking, Bhayani v Taylor Bracewell on goodwill, Ingenious Games v HMRC on the meaning of a view to profit, and Goldup v Cobb on partnership assets. Consistently with previous editions, the partnership section continues to incorporate a global perspective on partnership law developments, with substantial inclusion of caselaw from other, particularly common law, jurisdictions.

The much expanded section on LLPs continues to include chapters on the corporate structure and membership but now includes a separate introductory chapter and separate chapters on the rights and duties of membership, the LLP Agreement, decisionmaking, termination of membership, and insolvency and dissolution. In all of these the former coverage has been much expanded, reflecting the increasing importance of LLPs as the primary vehicle for professional service firms, and a significant vehicle for investment and financial services.

Short articles on new regulations in Jersey allowing overseas limited partnerships to continue as Jersey partnerships

International law firms Ogier, and Carey Olsen, have published short articles on forthcoming regulations in Jersey which will allow certain overseas limited partnerships to be apply for a certificate of continuance and be treated as Jersey limited partnerships. The articles are available at:

The 3rd Annual Partnership Conference on Thursday 17 September 2020 goes virtual!

Owing to the constraints of the current coronavirus crisis, we have decided that a shortened version of this year’s conference will be held online and will be free to attend. We hope this will enable even more delegates to attend.

Details will be announced in due course, but please do put the date – Thursday 17 September 2020 – in your diary if you have not already done so.

We hope to be back with our usual collegiate and friendly face-to-face conference in 2021.

Short article on Belgian partnerships

A short article by Dirk Van Gerven of the Brussels office of law firm NautaDutilh on Belgian partnerships, 'Acting for and Against a General Partnership Before the Courts', is available at:

Short article on partnership and LLP taxation in the UK

Andrew Constable, a tax partner at Moore Kingston Smith LLP accountants, has published a useful 4 page introduction to/summary of partnership and LLP taxation issues, including income tax, capital gains tax, inheritance tax and stamp duty land tax.

The article is 'Pride and Partnerships' (2020) 185(4748) Taxation 12 and is at:

If you do not have subscriber access to this journal, you can register for two weeks' free access.

Short article on recent Indian case on partnership dissolution

The  Indian law firm Khaitan & Co has published a short article on Guru Nanak Industries and Another v Amar Singh, in which the Indian Supreme Court discussed the distinction between partner retirement from an ongoing partnership, and partnership dissolution. The article is at:

Short article on recent Australian case on partner's interest in partnership property

The Australian law firm Clayton Utz has published a short article on Commissioner of State Revenue v Rojoda Pty Ltd, in which the Australian High Court confirmed that a partner's interest in partnership property is unascertained.  The article is at:

Book Review: Partnership Law

Partnership Law, Mark Blackett-Ord and Sarah Haren (6th edn, Bloomsbury Professional 2020), 1304pp., hardback, ISBN: 9781526508423. Also available as a PDF ebook 9781526508447 and as an EPUB ebook ISBN 9781526508430. 

The latest edition of this book, co-authored by leading barristers in the area of partnership law, is available in hard copy or as an e-book. It updates what was already a well-respected and authoritative text, regularly cited in court judgments. Although the first edition (1997) predated the introduction of LLPs, and despite the title, this text contains a substantial chapter on LLPs. In this respect it offers an advantage over its main competitor, Lindley & Banks on Partnership, which covers LLPs only in passing. However, it does not deal with taxation, which Lindley deals with in some detail.

The chapter and section structure of the book remains almost the same as in the previous edition, although there is now a useful section on derivative actions in the LLP chapter, reflecting the judgment in Harris v Microfusion (2016). This continuity is unsurprising given that the book has been regularly updated throughout its life (six editions in little over 20 years) and one would not expect radical changes to the format at this stage. The book continues to provide an extensive analysis of the law relating to all aspects of a partnership’s life, from whether and when it exists and whether a person is a partner (including chapters on capacity to be partner, illegal firms and holding out), to dissolution (three chapters) and insolvency (two chapters).

Chapters 2-18 are largely concerned with the relationship of partners inter se (with the arguable exception of the chapter on holding out of persons as partners), and cover partnership structures (including corporate partnerships), the partnership agreement, partnership assets and liabilities, capital, the tricky issue of a partner’s share in the partnership, the duty of good faith, management, discrimination, internal disputes and remedies, and the enforcement of those remedies. Chapters 19-23 cover relations with third parties, including partner liability, litigation by or against third parties, and insolvency. The detailed treatment of insolvency is something which is sadly likely to become more relevant in the near future, as the economic effects of the current pandemic become clear.

The structure of the book thus differs significantly from Lindley, which includes one very lengthy chapter on partnership agreements dealing with a range of material on the internal relationship between partners, some of which is also discussed in separate chapters, and which thus requires extensive cross referencing. In contrast, the chapter on partnership agreements in this book takes the opposite approach, being less than 20 pages long and dealing only with the bare essentials, including minimum terms, construction, variation and clauses which may be void or unenforceable in certain circumstances.

As well as a chapter on LLPs, there is also a chapter on limited partnerships, which has been updated to reflect the introduction in 2017 of the private fund limited partnership (PFLP) (discussed in the review of Lindley on this website) and the extensive modification of the provisions of the Limited Partnerships Act 1907 for PFLPs (though not, regrettably, for common-or-garden limited partnerships).

There are substantial footnotes (albeit rather quirkily placed at the end of each section rather than each page) directing the reader to relevant primary sources although, as with Lindley, this reviewer would have preferred more references to supplementary secondary sources for an academic audience,. However, as with Lindley it is acknowledged that this is a text aimed at (and used extensively by) legal practitioners.

The Appendices contain the key pieces of partnership legislation (the Partnership Act 1890, the Limited Partnerships Act 1907, the Limited Partnerships (Forms) Rules 2009, the Partnerships (Accounts) Regulations 2008, and the Insolvent Partnerships Order 1994) and two of the three key pieces of LLP legislation (the LLP Act 2000 and the LLP Regulations 2001). The LLP Regulations 2009 are inevitably omitted given their length (which stems from the fact they are devoted to applying provisions of the unfortunately lengthy Companies Act 2006). The Appendices also include the Company, LLP and Business Names Regulations 2009, the joint BVCA and HMRC statement 1987 which did so much to encourage the use of limited partnerships as tax avoidance vehicles by confirming that a limited partnership used as a venture capital investment fund would be treated for tax purposes as tax transparent, and (purely for historical interest) the now repealed Law of Partnership Act 1865.

This new edition includes an explanation and analysis of relevant legislative and jurisprudential developments since the previous edition in 2015, including the PFLP legislation, the Insolvency Rules 2016 (repealing and replacing the 1986 Rules) which apply also to individuals and companies and which provide much of the detail of insolvency proceedings, and the important case of Flanagan v Liontrust (on the repudiation of an LLP agreement, discussed in the review of Palmer’s Limited Liability Partnership Law on this website)

This sixth edition of Blackett-Ord and Haren thus continues to provide a comprehensive and authoritative source of reference for academics, postgraduate students and practitioners in this area of law. It should not be regarded as an alternative to Lindley, but as complementary to it (and vice versa). First, there are the big differences in coverage; the inclusion of a particularly useful chapter in LLPs in Blackett-Ord but not in Lindley, and the extensive tax coverage in Lindley which is missing from Blackett-Ord. Second, there are inevitably small points (but nonetheless potentially important in the right context) which only one text covers; for example, the possible legislative error in the grounds for a partner to obtain leave of the court to petition for the winding up of a small partnership is mentioned in Blackett Ord but not Lindley. Finally, there is inevitably disagreement between the two texts on some issues; for example, on the application of the doctrine of repudiation to two-partner firms, or to multi-partner firms when the disputing partners fall into more than two camps.

Short article on UK partner tax deferral (new pandemic-related option)

The most recent issue of the journal Taxation contains a short article by Tim Parr, 'Partnership deferral of self-assessment payment' (2020) 4746 Taxation, on the usefulness of the new UK provisions allowing partners (or LLP members) to defer payment of their income tax. It is at:

If you do not already have access to this journal you can register for two week's free access.

Recent UK case on the rights of an outgoing partner

Deacon v Yaseen [2020] EWHC 465 (Ch)

The parties were medical practitioners and former partners in a doctor’s practice. The continuing partner sought to exercise her option under the terms of the partnership agreement to purchase the share of the outgoing partner in the partnership. However, a dispute arose as to how the lease of the partnership premises was to be valued.

That lease contained a rent review clause, but the rent had never actually been increased and the market rent would have been substantially greater. Under the contract between the partnership and the National Health Service (NHS) Commissioning Board for the partnership to supply general medical services, the cost of the lease for the premises from which those services were carried out was reimbursed by the Board to the partnership. The National Health Service (General Medical Services – Premises Costs) Directions 2013 provided that the payment should be either the current market rent or the actual rent, but for reasons which the court was unable to ascertain, the payments in this case had been for the market rent plus the actual rent

The continuing partner was particularly concerned not to overpay for the outgoing partner’s share of the premises, particularly if that overpayment was considered to include an element of goodwill, because the sale of goodwill of a medical practice would be unlawful under the National Health Service Act 2006. The court noted the definitions of goodwill provided in Trego v Hunt [1896] AC 7 and Commissioners of Inland Revenue v Miller and Co’s Margarine Ltd [1901] AC 217, but held that these definitions had to be considered in the context of the specific contractual and statutory provisions applicable in a particular case. Here, the payments made by the Board in respect of rent were clearly made in respect of premises costs, and were not referable to, or variable by reference to, the business success of the practice. They were therefore not goodwill for the purposes of the 2006 Act.

As to what interest the outgoing partner had in the premises, and whether he was entitled to be paid any sum additional to that provided for in the partnership agreement (which was the net value of his share shown in the dissolution accounts), the court concluded that the general position, subject to contrary agreement, was that an outgoing partner was entitled to the value of their share in the partnership, including partnership assets, at the date of departure. The usual remedy to ascertain this value was an inquiry, a valuation, and an account. Once ascertained, this amount became a debt due to the outgoing partner from the continuing partners.

On the facts, the court held that the outgoing partner had failed to demonstrate an agreement contrary to the general law position, and was therefore entitled to a debt rather than a particular asset. The difference between Clause 8 of the partnership agreement, which stated that the partnership property included the lease of the premises, and Clause 10, which stated that partners owned shares in the premises as set out in Schedule 3 to the agreement, which were different still to the shares in the partnership which were as set out in Schedule 2, did not mean that the premises were not a partnership asset. Nor did the fact that partners over the years had mortgaged their shares of the premises, since they retained the equity of redemption to contribute to the partnership, and this included the vital right to use the premises for business purposes.



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