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URL: http://www.bailii.org/scot/other/SLC/Report/2003/192(10).html
Cite as: [2003] SLC 192(10) (Report)
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PART X
PARTNERS' FINANCIAL AND MANAGEMENT RIGHTS, EXPULSION AND RETIREMENT
Introduction10.1 This Part deals with the financial and management rights of partners which are currently covered in section 24 of the 1890 Act. We also address the expulsion, suspension and compulsory retirement of partners.[1]
Financial and management rights
Existing law
Capital contributions10.2 Partners usually contribute sums to the partnership for the purpose of commencing or carrying on the partnership business. These sums form the capital of the partnership. Where partners contribute money or assets to the partnership as partnership capital, the money or assets will belong to the partnership. In the absence of contrary agreement, the capital of the partnership cannot be increased or reduced without the consent of all the partners.[2] As a result a partner cannot withdraw capital while he is a partner without the consent of co-partners but capital can be written off if it is lost.
Partnership accounts10.3 While partners must prepare accounts for tax purposes in accordance with the requirements of the Inland Revenue, there is no regulation of the way in which internal partnership accounts may be prepared for the purpose of allocating profits between the partners. Nor is there any regulation of the way in which partnership assets are valued in a partnership's internal accounts. Partnership accounts are a private matter between the partners.
Profit shares10.4 Unless they agree to the contrary, partners are entitled to share equally in the capital and profits of the business and must contribute equally to the losses which a partnership sustains.[3] In Popat v Shonchhatra,[4] the Court of Appeal considered the meaning of section 24(1) of the 1890 Act in relation to partners' capital contributions. The effect of the Court of Appeal's decision is that, in the absence of agreement to the contrary, partners are entitled to share equally in a partnership's capital even though one partner has contributed £1 and another £1 million. Nonetheless, the court made it clear that the slightest indication of an implied agreement that partners' shares of capital should correspond to their contributions would suffice to displace the default rule of equal shares.[5] Thus significant inequality of capital contributions may be sufficient evidence of itself to displace the presumption of equality.
Indemnity against loss and expenses10.5 A partner has the right to be indemnified against losses and expenses incurred for the benefit of the partnership. Section 24(2) of the 1890 Act provides that, subject to agreement to the contrary:
The firm must indemnify every partner in respect of payments made and personal liabilities incurred by him –
(a) in the ordinary and proper conduct of the business of the firm; or
(b) in or about anything necessarily done for the preservation of the business or property of the firm.
Interest on advances10.6 In the absence of agreement, a partner is not entitled to interest on the capital contributed to the partnership.[6] But a partner is entitled to simple interest at 5% on any payment or advance made to the partnership in addition to his capital contribution.[7] Again, like the other provisions of section 24, this rule is subject to any agreement, express or implied, between the partners.
Participation in management10.7 Section 24 (5) of the 1890 Act provides that, subject to agreement to the contrary:
10.8 Participation in the conduct of partnership business is the essence of partnership law: partners carry on business together with a view of profit. As partners have unlimited liability for all partnership debts and obligations they would expect to engage in the management of the partnership business, unless they agreed otherwise.[8] As a default rule a partner is not entitled to remuneration for acting in the partnership business.[9]Every partner may take part in the management of the partnership business.
Decision making: majority or unanimity10.9 Participation in the management of the partnership business involves partners in differences of opinion. The default rules of the 1890 Act distinguish between "ordinary matters" connected with the partnership business, which may be decided by majority, and other matters.[10] The Act requires, as default rules, the consent of all existing partners before a person can join a partnership[11] and for any change in the nature of the partnership business.[12] Many partnerships define in their partnership agreements the matters which require to be decided either by a special majority or by unanimity.[13] But the 1890 Act does not define what is meant by an ordinary matter connected with the partnership business. In the absence of contractual definition, that is a question of fact. Nor does the 1890 Act provide for special majorities.
Our provisional proposals
Partnership accounts10.10 In the Joint Consultation Paper we observed that if a partnership's internal accounts were prepared according to known accounting standards, an incoming partner would have a more transparent basis on which to make a judgement before becoming a partner. Nonetheless we were not in favour of prescribing mandatory accounting standards for partnerships. Partnership accounts are private documents which partners prepare for their own purposes and no outside party has a legitimate interest in them. To obtain views on the issue, we asked consultees whether a partnership's internal accounts should be required to comply with accepted accounting standards, unless partners agree otherwise.[14]
Capital and profit shares10.11 We also discussed partners' rights to share equally in the capital and profits of the partnership business and the effect of the Court of Appeal's decision in Popat v Shonchhatra,[15] asking whether consultees considered there was a need to amend section 24(1) of the 1890 Act in the light of that case. We asked whether consultees would favour a provision that, subject to agreement to the contrary, partners should be entitled to the return of their capital contributions in the same proportions as they were contributed.[16]
10.12 Recognising that in some partnerships profit shares may vary according to the level of partnership profits or a partner may have some preferential entitlement, we questioned the effect of such variable profit shares on the apportionment between partners of liability to bear losses. We asked whether it should be provided that, subject to agreement to the contrary, losses would be borne in the same proportions as the ultimate residue of assets would be shared under section 44 of the 1890 Act.[17]
Interest on advances10.13 We also proposed that the rate of interest payable to a partner on a payment or advance beyond the partner's agreed capital contribution should be a commercial rate related to the Bank of England's base rate and not the fixed rate of five per cent.[18]
Management decisions10.14 In relation to management rights we asked whether it should be provided that, subject to agreement to the contrary, the consent of all the partners would be necessary for (a) a change in the location of the partnership premises, (b) any restriction on the authority of one partner which is not part of a general restriction on the authority of all the partners or (c) any other decisions. We also discussed whether it was appropriate to relax the requirement of unanimity in relation to specified decisions but expressed the view that such matters were best left to the partnerships themselves. We proposed that there should be no new statutory rules as to special majorities for votes on "extraordinary" decisions.[19]
Consultation
Partnership accounts10.15 Consultees unanimously agreed with our proposition that partnerships should not have a mandatory obligation to comply with specified accounting standards when compiling their internal accounts. Views were divided on whether a partnership's internal accounts should comply with such accounting standards, unless partners agree otherwise. A clear majority were against the idea although there was more support in Scotland for the idea than elsewhere in the UK. Accountancy bodies who responded to the question were unanimously against the idea. It was suggested that such intervention would not be justified as accounting standards were prepared for bodies which required to produce external accounts which showed a true and fair view and not for private partnership accounts. It would not achieve standardisation of partnership accounts as partnerships could opt out of the requirement. The idea was of little worth as partnerships must produce accurate accounts for tax purposes, which could be made available to incoming partners. Partners were in any event under a duty of good faith towards each other and that included keeping full and accurate financial records.[20]
Profit shares and return of capital contributions10.16 There was general support for the proposal to amend section 24(1) of the 1890 Act in the light of the Court of Appeal's decision in Popat v Shonchhatra[21] to the effect that there should be a default rule that partners should be entitled to the return of their capital contributions in the same proportions as they were contributed. The Chancery Bar Association suggested that the proposal reflected the existing law and that the deletion of the words "the capital and" in section 24(1) of the 1890 Act would achieve the desired result.[22]
10.17 Several consultees raised the problem of providing a statutory mechanism for the valuation of non-monetary contributions to a partnership such as assets, labour or expertise.[23] The problem of valuing a non-monetary contribution to a partnership arises whether the default rule provides for an equal division of capital or for the return of capital contributions in the same proportions as they were contributed. In either case, a partner who made a non-monetary contribution to the partnership would require to negotiate an agreed valuation of that contribution, if he wished to receive value for that contribution on a winding up of the partnership.[24]
10.18 Views were divided on the need to amend section 24 of the 1890 Act to cater for preferential profit shares by providing that losses should be borne in the same proportion as the ultimate residue of assets would be shared under section 44 of the 1890 Act. A majority favoured the proposal but several consultees considered it an unnecessary complication.
Interest on advances10.19 There was general support for the proposal to replace the fixed rate of interest on advances made by partners to a partnership with a commercial rate of interest.[25] A minority opposed the proposal. One consultee preferred the interest rate to be the rate on judgments to avoid the statement in the statute of a rate which might disappear as a result of a commercial decision. Another advocated the repeal of the provision for interest on advances which it considered to be a trap for the unwary because it was little known and seldom invoked.
Management decisions10.20 Consultees gave little support to any new default rule which required unanimity for particular management decisions such as a change in the location of the partnership premises. Several consultees argued that it was not appropriate to select particular decisions; the circumstances of partnerships varied greatly and detailed rules would not suit all partnerships.[26] While some consultees supported a default rule requiring unanimity for a restriction on the authority of a particular partner, others suggested that it would not be helpful. One consultee suggested that such a restriction would not be an "ordinary matter" and would already require unanimity under the default rules of the 1890 Act. Others considered that such a rule would encourage litigation or the dissolution of a partnership. A partner who was being victimised would have other remedies in equity.[27]
10.21 Consultees unanimously agreed with our provisional proposal that there should be no new statutory rules as to special majorities for votes on "extraordinary matters".
Reform recommendations
Partnership accounts10.22 We recommend that a partnership's internal accounts should not have to comply with accepted accounting standards. We are persuaded by the arguments of consultees that it is inappropriate to regulate the private accounts of partnerships and that it is unnecessary as partners are under a duty of good faith to each other and are required in any event to produce acceptable accounts for tax purposes.[28] Accordingly, we recommend no such requirement either as a mandatory obligation or as a default rule.
The return of capital contributions, profit shares and responsibility for losses
The return of capital contributions10.23 With hindsight, we think that we may have caused consultees unnecessary confusion by referring in the Joint Consultation Paper to the decision of the Court of Appeal in Popat v Shonchhatra[29] without stating the specific propositions which we derived from the case. Nevertheless, we maintain that it is clear what the appropriate policy should be: there should be no default rule that partners share equally in capital and therefore that they receive equal amounts on the return of capital on final settlement of accounts.[30] Instead partners should be entitled to the return of their capital contributions on final settlement of accounts.[31]
Profit shares10.24 We recommend therefore that the rule, which is currently section 24(1) of the 1890 Act, which provides for equality between partners in relation to capital, profits and losses should be restricted to profits and losses. Such profits and losses would include capital profits and losses, for example on the disposal of partnership assets which are not held as part of the partnership's trading stock.[32] We discuss the rights of partners to a return of capital on final settlement of accounts in Part XII below.[33]
Responsibility for losses10.25 We have considered whether, in order to promote certainty, the draft Bill should provide as a default rule that, where profit shares vary according to the level of partnership profits or there are preferential entitlements, losses should be borne in the same proportion as residual profits are shared. This would equate responsibility for losses with the profit shares available to partners after allowing for prior calls on profits. While some consultees supported such a provision to remove uncertainty, we are not persuaded that it is necessary. While the issue may give rise to some problems in practice, it is difficult to provide a default rule which is suitable and fair in widely varying circumstances. It may be clear in many cases that preferential profit shares are to be ignored and that liability for losses should be equated with partners' entitlements to residual profits. In other cases it may be inferred from the nature of the preferential share that partners envisaged that losses would be borne in proportions which include the benefit which a partner received from a prior call on profits. Thus where a partner is entitled to, say, the first £5000 of profits, parties may intend that he meet the first £5000 of losses. We see no need to complicate the default code.
Interest on advances10.26 We recommend that partners should be entitled to a commercial rate of interest on loans which they make to a partnership. We prefer this to the fixed rate of interest of 5% which may be appropriate at some stages of the economic cycle but wholly inappropriate at others.[34] This recommendation fits with our general policy to use a commercial rate in other provisions of the draft Bill, such as the provision on the right of a former partner to interest on his share of the partnership until he is paid out.[35]
Management decisions10.27 We see no need to alter the default rules by specifying particular decisions which require unanimous consent or by providing for certain decisions to be taken by special majorities. We agree with consultees that detailed rules would not be appropriate as the circumstances of partnerships differ so greatly. Accordingly, we preserve in the draft Bill the distinction in the 1890 Act between "ordinary matters" which can be decided by majority vote and other matters which require unanimity.[36] The provisions of the 1890 Act requiring unanimity before a new partner may join a partnership and for a change in the nature of the partnership business are preserved in the draft Bill.[37]
Agreement on capital contributions10.28 We think that it would be useful to state as a default rule that a partner is not entitled, nor may he be required, to contribute capital or to vary the amount of his capital contribution to the partnership unless he and all the partners agree.[38]
Other default rules in section 24 of the 1890 Act10.29 We think that the other existing default rules in section 24 of the 1890 Act should be re-enacted.[39] We have taken the opportunity to clarify the circumstances in which a partner is entitled to an indemnity in respect of payments made in the proper conduct of the partnership business. We consider that a partner should be entitled to an indemnity when he, acting in good faith and reasonably, pays a claim against the partnership, which in fact turns out not to be due.[40] The requirements of good faith and reasonable behaviour mean that in most circumstances the partner will have to consult his partners before meeting the claim if he wishes to obtain an indemnity.[41]
10.30 We therefore recommend that:
(1) The default rule (currently section 24(1) of the 1890 Act) which provides for equality between partners should be confined to profits and losses and should not refer to capital; (Draft Bill, cl 11)
(2) As a default rule, partners should be entitled to a commercial rate of interest on advances which they make to a partnership; (Draft Bill, cls 13 (1), (4) and (5) and 76(1))
(3) There should be no statutory rules providing for decision making by special majorities but the distinction between "ordinary matters" which can be decided by majority vote and other matters which require unanimity should remain the default rule and it should be clarified that the question whether a partnership should raise or defend legal proceedings is an ordinary matter; (Draft Bill, cl 14 (1), (3), (4) and (5)).
(4) There should be a default rule that the agreement of all the partners is required for a partner to be entitled, or required, to contribute capital to the partnership or vary the amount of his capital contribution; (Draft Bill, cl 13(1) and (2))
(5) Other default rules of section 24 of the 1890 Act (the requirement of unanimity for a change in the nature of the partnership business, no entitlement to remuneration, no entitlement to interest on capital, entitlement to take part in the management, unanimous agreement to the introduction of a new partner) should be re-enacted. (Draft Bill, cls 6(4), 12(1) and (2), 13(1) and (3), 14(1) and (2) and 27)
(6) A partner's right to indemnity should be clarified so that he should be entitled to indemnity from the partnership where in good faith and reasonably he pays (or contributes towards) a claim made against the partnership. (Draft Bill, cl 12(3)(b), (5) and (8))
Expulsion, suspension and compulsory retirement
Existing law10.31 While partnership agreements often contain provisions which allow the expulsion, suspension or compulsory retirement of partners, the default regime of the 1890 Act does not. Section 25 of the 1890 Act provides:
10.32 As a result, partnerships which do not have partnership agreements with such a power and who wish to rid themselves of a discordant partner have the options of (a) persuading the discordant partner to agree to be bought out and (b) applying to the court under section 35 of the 1890 Act to have the partnership dissolved.No majority of the partners can expel any partner unless a power to do so has been conferred by express agreement between the partners.
10.33 As there can be a delay in finally determining a partner's expulsion, many partnership agreements provide for the suspension of the partner for a specified period to prevent him entering the partnership premises or taking part in management. A usual suspension clause will preserve the suspended partner's financial rights.[42] Many partnership agreements also have provisions for compulsory retirement, which in effect provide for "no fault" expulsion. These are useful particularly in large partnerships to prevent a partner or small minority from holding a partnership to ransom where there is a disagreement on policy. The default regime of the 1890 Act provides neither for suspension nor for compulsory retirement.
Our provisional proposals10.34 In the Joint Consultation Paper we observed that a power to expel was expropriatory in nature, at least so far as future profits are concerned. A power to expel is also arguably contrary to the essence of partnership as an association of equals and joint owners of a business. On the other hand a statutory power of expulsion might reduce the number of partnership disputes which reach the courts. We expressed the provisional view that it would not be appropriate to give a majority or even a special majority a statutory power to expel a partner. As we proposed to give the court power to expel a partner on certain grounds, we considered that it was not necessary to give a majority a power to expel by implied agreement in the default regime.[43]
10.35 We also provisionally proposed that there should be no power of suspension unless the partners expressly agree to one.[44] As the suspended partner would remain a partner during the period of suspension and would retain unlimited liability for partnership debts and obligations, we suggested that such a power was inappropriate in the default regime. We also provisionally proposed that a compulsory retirement power should not be included as a default rule.[45]
Consultation10.36 There was general support for our proposal that if the courts are given the power to expel a partner there should be no other general power of expulsion unless the partnership agreement expressly provides for it.[46] In Part VIII of this report we recommend that the court should have the power to remove a partner and also power to make interim orders (which would allow the court to suspend or limit a partner's authority).[47]
10.37 Only two consultees argued for a default power of expulsion in these circumstances. The APP suggested that there should be a power to expel a partner on the grounds of incapacity, conduct prejudicing the carrying on of the partnership business, wilful or persistent breaches of the partnership agreement and bankruptcy. The British Medical Association (BMA) stated that they would only accept continuity of partnership if there was a power of expulsion or a power of compulsory retirement in the default regime.
10.38 A substantial majority of consultees opposed a power of expulsion even if the court was not to have power to expel. Similarly, a substantial majority agreed that there should not be a power of suspension unless partners expressly agree to one. Only one consultee[48] argued strongly for a default power of suspension. They considered such a power to be essential in extreme circumstances, as for example when the Financial Services Authority or the Serious Fraud Office investigate a partner. They considered that the prejudice to a partnership in the absence of suspension would be greater than the prejudice to a suspended partner.
10.39 Almost all consultees agreed with our provisional proposal that the default regime should not include a power of compulsory retirement.[49]
Reform recommendations10.40 As we recommend that the court should have power to remove a partner from a partnership,[50] we see no need to create a default rule which gives partners a general power to expel a partner. For the reasons discussed above, we do not think that such a draconian power should be a matter of implied agreement in a partnership. While we recognise the argument, which the APP advance, that many partnerships benefit from express powers to expel and suspend a discordant partner, we remain of the view that partners should expressly agree to such powers.[51] We have recommended that the court should have power to make interim orders on an application to remove a partner, prohibiting a partner from taking part in, or limiting the extent to which he may take part in, the partnership business and affairs.[52] We have also suggested that the general law would give the other partners powers to protect themselves against a partner who was acting in serious breach of duty, pending any application to the court.[53] We think that is sufficient.
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Note 1 We include our discussion of expulsion and retirement in this part (rather than in Part VIII) as it concerns the rights and powers which the default code gives the partners as against each other. [Back] Note 2 See Heslin v Hay (1884) 15 LR Ir 431 and Bouch v Sproule (1887) 12 App Cas 385, 405, per Lord Bramwell. [Back] Note 3 1890 Act, s 24 (1). [Back] Note 4 [1997] 1 WLR 1367. [Back] Note 5 Op cit, Nourse LJ at p 1373. [Back] Note 6 1890 Act, s 24(4). [Back] Note 7 1890 Act, s 24(3). [Back] Note 8 Different rules apply in relation to limited partners under the Limited Partnerships Act 1907. See Part XVII below. [Back] Note 9 1890 Act, s 24(6). [Back] Note 10 1890 Act, s 24(8). [Back] Note 11 1890 Act, s 24(7). [Back] Note 12 1890 Act, s 24(8). [Back] Note 13 For examples of matters on which partnership agreements commonly require higher majorities, see the Joint Consultation Paper, para 12.34. [Back] Note 14 Joint Consultation Paper, para 12.12. [Back] Note 15 [1997] 1 WLR 1367. [Back] Note 16 Joint Consultation Paper, para 12.18. [Back] Note 17 Joint Consultation Paper, para 12.25. [Back] Note 18 Joint Consultation Paper, para 12.28. [Back] Note 19 Joint Consultation Paper, para 12.42. [Back] Note 20 See the 1890 Act, s 28 and s 24(9). [Back] Note 21 [1997] 1 WLR 1367. [Back] Note 22 The 1890 Act s 24(1) would then read: “All the partners are entitled to share equally in [ ] the profits of the business…”. [Back] Note 23 The Law Society, the Faculty of Advocates, Roderick Banks, and the Centre for Research into Law Reform identified the problem. Professor Morse and David Guild suggested that the Law Commissions should consider making the decision of the Court of Session in Bennett v Wallace 1998 SC 457 a default rule. In that case the Court of Session decided that all assets brought into the partnership should be included in the accounting between the partners both at the start and at the end of the partnership relationship, subject to agreement to the contrary. Consequently, an incoming partner would be entitled only to a share in the increase of the value of an asset such as work in progress. In our view the decision is correct on the facts of that case, where the parties had reserved the valuation of work in progress at the outset of the partnership. But there may be difficulties in applying the reasoning of the court generally, particularly where assets have not been valued at the start of a partnership relationship and the passage of time makes such valuation impracticable. SeeLindley & Banks, para 10-171. [Back] Note 24 Partners must agree to the contribution of capital to a partnership. See para 10.2 above. A partner who wishes to have his non-monetary contribution treated as a capital contribution would require to negotiate that at the outset. [Back] Note 25 1890 Act, s 24(3). [Back] Note 26 There were tentative suggestions that unanimity could be required for deciding (a) the bank at which the partnership’s accounts were to be held, (b) who were to be the partnership’s accountants and (c) for borrowings in excess of capital. The Association of Chartered Certified Accountants (ACCA) suggested that there should be a prescribed list of “ordinary matters” which were to be decided by majority vote. But a clear majority suggested that the law should not be changed and that detailed provision would lead to hard cases. [Back] Note 27 He would have the right to seek a winding up of the partnership on the just and equitable ground – 1890 Act s 35(f). [Back] Note 28 See para 10.15 above. [Back] Note 29 [1997] 1 WLR 1367. [Back] Note 30 We use the word “capital” in its natural meaning to refer to the aggregate of the capital contributions of the partners and not the capital value of the partnership’s assets. SeeLindley & Banks, paras 17-01 and 17-09. Our policy involves a departure from the underlying principle of community of profits and also losses (both external and internal). The departure is balanced by our recommendation to remove the rule that on final settlement of accounts partners must make good deficiencies of capital. See para 12.128 below. [Back] Note 31 See para 12.128 below and draft Bill, cl 44 (3). [Back] Note 32 See Popat v Schonchhatra [1997] 1 WLR 1367, 1373 per Nourse LJ. [Back] Note 33 In summary, we recommend that on final settlement of accounts partners should be entitled to the return of their capital contributions in the same proportions as they were contributed where there are sufficient assets to repay capital. See draft Bill, cl 44 (3) and paras 12.119 –12.128 below. [Back] Note 34 Clause 13(4) of the draft Bill refers to interest on advances and not, as in the 1890 Act, s 24(3) to “any actual payment or advance”. We do not think that a partner should have an automatic right to interest on monies which he pays out for the partnership, for example in meeting a debt of the firm under a guarantee. See Ex parte Chippendale (1854) 4 De GM & G 19. A partner will be entitled to an indemnity under cl 12(3) and (5) in relation to liabilities incurred in the proper conduct of the partnership business. [Back] Note 35 See para 8.75(2) above and draft Bill cl 32(2)(b). [Back] Note 36 We also recommend unanimity before a partnership liquidator is authorised to exercise certain powers (see para 12.78 below) and where partners exercise an option to expel a partner whose interest has been attached by personal creditors (see para 8.110(6) above). [Back] Note 37 1890 Act, s 24(7) and (8). See also RUPA s 401(i) and (j). [Back] Note 38 This is the existing law. See para 10.2 above. See also Popat v Shonchhatra [1997] 1 WLR 1367, 1373 per Nourse LJ. [Back] Note 39 We have replaced the requirement that partnership books are kept at the principal place of business of the partnership and that every partner should have access to them (1890 Act, s 24(9)) with a duty on partners to keep accounting records. See para 11.34 below. [Back] Note 40 We think that this is the existing law. SeeLindley & Banks, para 20-13; Re Webb (1818) 8 Taunt 443, 129 ER 455 and McIlreath v Margetson (1785) 4 Doug KB 278, 99 ER 880. [Back] Note 41 In the draft Bill, cl 12(3)(b) we do not refer to good faith but merely to “the reasonable settlement of an alleged personal liability for a partnership obligation”. As partners owe a general duty of good faith (draft Bill, cl 9), we see no need to refer expressly to the requirement of good faith. [Back] Note 42 See, eg, R C I’Anson Banks, Encyclopaedia of Professional Partnerships (1987) (Looseleaf: latest update 2003) Precedent 1, cl 21(1). [Back] Note 43 Joint Consultation Paper, para 13.9. [Back] Note 44 Joint Consultation Paper, para 13.13. [Back] Note 45 Joint Consultation Paper, para 13.15. [Back] Note 46 We do, however, recommend a specific power to expel where a partner allows his partnership share to be charged or, in Scotland, arrested. See para 8.110(6) above. [Back] Note 47 See paras 8.126 and 8.131 above. [Back] Note 48 The Law Society. [Back] Note 49 The only consultee which disagreed was the BMA; see para 10.37 above. [Back] Note 50 See para 8.126 above. [Back] Note 51 Partnership agreements sometimes provide for a power of suspension without requiring proof of wrongdoing by the partner to be suspended. We consider that this should be the subject of express stipulation. [Back]
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