- 10 Marks
BCL – L1 – Q54 – Alternative forms and constitutions of business organisations
Question
By a letter dated 18th February 2014, addressed to the Manager of their partnership firm, Kofi Amo informed the Management of his and Mrs. Mensah’s immediate retirement as partners. The Manager replied that their application was under consideration. However, by another letter dated 12th January, 2015, Mr. Kofi Amo and Mrs. Mensah withdrew their letter dated 18th February 2014. The conduct of the remaining partners, however, showed that they considered the letter of 18th February 2014 to be of no effect, and continued the partnership accordingly. A dispute later arose and James, one of the partners, obtained an order of the High Court directing Mr. Kofi Amo and Mrs. Mensah to submit themselves to arbitration in accordance with the partnership agreement. The arbitrator submitted to the court that by their letter dated 18th February 2014, Mr. Kofi Amo and Mrs. Mensah ceased as from that date to be partners as the said letter could not be recalled.
Required:
Explain whether by the provisions of the Incorporated Private Partnership Act, 1962 (Act 152), Mr. Kofi Amo and Mrs. Mensah, remain partners in the firm after their letters of 18th February 2014 and 12th January 2015.
Answer
See Section 39(7) of the Incorporated Private Partnership Act, 1962., Act 152.
Upon the retirement of a partner, certain steps should be taken.
The remaining partners must in accordance with Section 7 of the Act, within 28 days of the retirement, notify the Registrar of Companies of the fact.
The Registrar in turn is bound upon such notification to amend the certificate of registration of the company and insert a notice in the Gazette signifying the change.
The partners who remained after the letter of 18th February 2014 did nothing about the letter.
As a result, the original certificate of Registration with the names of all the original four (4) partners remain unaltered.
That all the other partners seemed to have agreed that the letter of 18th February 2014, whether it constituted notice to the partners or not, should be ignored.
The conduct of the partners, after the letter of 18th February 2014, overwhelmingly favours the view that the letter was treated by consent of all of them as of no effect.
That Mr. Kofi Amo and Mrs. Mensah remained partners of Partnership after 18th February 2014, because the rest of the other partners did not comply with the statutory requirements of Section 39 (7) of the Incorporated Private Partnership, Act, 1962 (Act 152).
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