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Mercantile Persons.-

Trade is carried on by single individuals and collective bodies, acting as merchants, tradesmen, dealers (wholesale and retail), or agents, thus forming the class of mercantile persons.

According to English law such persons, are distin­guished into sole traders, private partnerships, and joint stock companies.

Some Traders and Partnership.-

A merchant is called a sole trader, who does business in his own exclu­sive name, and for his own exclusive account and risk.

A private partnership is the association of two or more persons, within a certain number fixed by law, who join together their money, labour, and skill for the purpose of carrying on a commercial undertaking in a community of profits and losses.

When formed upon this principle it may be properly called a partnership in joint stock.

Constitution of Partnership.-

Two or more persons of full age, not exceeding twenty (in banking, ten) in number, may enter into partnership by entering into a partnership agreement, wherein the conditions of the partnership are clearly fixed.

This may be by word of mouth, but is more generally in writing. As the conditions are sometimes very numerous, it is often customary to restrict the agreement to the simplest form, a pending to it the bulk of conditions under the form of articles of co-partnership.

The agreement, or the articles of co-partnership drawn up in addition to it, should point out the object of the partnership, the firm or style under which it is to act; the trade mark or brand adopted, if any ; the time when the partnership is to commence; its duration; the mode of dissolution ; the amount and proportion of capital to be paid in by each partner, and his share in the profits and losses; the mode of winding up the affairs in case of dissolution; besides such other and special provisions as may best suit each case.

As partnership is only a branch of the law of agency, any of the ordi­nary partners in a general partnership is fully em­powered to bind his co-partners either by executing simple contracts respecting the goods or business of the firm, or by circulating negotiable instruments in its behalf, as it is an acknowledged principle of mercantile law that each partner is the accredited agent of the rest.

The partner who has the faculty of binding his co-partners is, of course, in his turn bound by their acts, as far as the business of the firm is concerned. The signature of one partner binds the firm.

Such liability extends both to nominal and dormant partners, the latter being charged, however, only on their relationship to the firm being detected.

As to the division of profits, a nominal partner has no right to any share in them, since there exists no contract between him and the firm to enforce his claim.

Such is not the case with a dormant partner, who is, no doubt, along with his co-partners, a share in the profits, and therefore liable for the engagements of the firm.

In the case of a limited partnership, however, the management of the business and the consequent power of binding the firm devolve entirely on its general partners in consideration of their unlimited liability, to the exclusion of the limited ones; the fact of a limited partner having in any way taken part in such manage­ment would make him liable for all debts and obliga­tions of the firm as though he were a general partner.

Down to 1908 there was only one description of private partnership in the United Kingdom, but a sensible alteration was brought about by an Act of the 28th August, 1907, which came into operation on the 1st January, 1908.

The form of partnership existing prior to the above date was characterized by the unlimited liability of its members, as the Partnership Act of 1890 then in sole force did not admit of any limitation of responsibility for the members of a private partnership.

By the above quoted Act of August, 1907, a new form of partnership was created to consist of one or more persons, who shall be liable for all debts and obli­gations of the firm, and one or more persons to be liable only for sums they have contributed towards the forma­tion of the partnership’s capital, which sums must be stated in the partnership agreement.

The former description of partnership is called a general Partnership, and the latter a Limited Partnership. The constitution of a limited partnership, as well as any change that may occur during its continuance, are to be declared at the official register office, and the statements thus filed are open for inspection to any person on payment of a fee.

As regards their duration, partnerships may be either at will or for a term.

A partnership is said to be at will when no limit has been fixed to its duration, and it may therefore be dis­solved at any time; while a partnership for a term is that for which the time of “dissolution has been previously fixed by the original agreement.

Partners.-

The members of a partnership are called partners, because they hold a part in the concern, and are co-partners to each other.

They are collectively called the firm, and the name under which they carry on business is the firm name.

Partners in British trade are chiefly distinguished into active, dormant, and nominal.

Active ox ordinary partners are those who have joined together their money or labour in a common undertaking for the purpose of mutual profit, and who are known to the public in such capacity.

A dormant, sleeping, or silent partner is, on the contrary, one not known as a partner, but who partakes in the profits. He is a passive partner.

A nominal or ostensible partner is one who lends his] name to a firm without entering into any contract off partnership, and is therefore fairly supposed by the public to be a sharer in the business of the firm.

One who holds himself out as being a partner, without being such, is on the same footing. Both are liable to any person giving credit to the firm. The definition may also apply to ordinary partners, as they are both actually and ostensibly members of the firm.

The partners of a limited partnership may be either general or limited-their number cannot exceed ten for banking business and twenty for general business.

General partner means any partner who is held by the law as fully liable for all debts and obligations of the firm. Limited partner is, on the contrary, the partner who has contributed either money or property to the capital of the firm, and is not liable beyond the sum or the value of the property thus contributed.

Besides these most important descriptions, partners are also distinguished as managing, working, retiring, surviving, continuing, and retired, according to their particular position in the firm.

In some firms, for instance, one or more partners are charged, under the partnership agreement, with the whole management of the business to the exclusion of the others.

The power of acting as the representative of the firm devolves, therefore, on them only, and they are called managing partners.

A working partner is one who has no share in the capital stock of the firm, but contributes his sole labour towards the management of the business.

A partner is said to be continuing when he continues the business on his own account after the dissolution of the firm, and is called retired when, having ceased to be a member of the firm, he is still liable for transactions which took place before his retirement.

Disolution of Partnership

A firm is dissolved de jure at the expiration of the term fixed in the agree­ment ; it may also be dissolved either by mutual consent, by the object of the partnership becoming un­lawful, by breach of partnership agreement, or through death, retirement, lunacy, disability, expulsion or bank- ruptcy of one or more partners, or when it can only be carried on at a loss.

Provided, however, that, in the case of a limited partnership, the death, bankruptcy, or lunacy of a limited partner shall not be ground for such dissolution which is to be resolved upon by the Court on application.

The winding up of affairs takes place when­ever a partnership is dissolved, and in case of bankruptcy.

As to the mode of winding-up, it is usually declared in the deed of partnership, and in default, by mutual agreement of the parties, by arbitrators, or by the Bank­ruptcy Court, this last being always the case when the firm is adjudged bankrupt under the Bankruptcy Acts.

The affairs of a limited partnership are, on the con­trary, to be wound up by the general partners unless otherwise ordered by the Court.

Notice of the constitution or dissolution of a firm should be announced by circular letters and by adver­tisement in the London Gazette; the Edinburgh Gazette, or the Dublin Gazette.