Statute Details
- Title: Partnership Act 1890
- Full Title: An Act to declare and amend the Law of Partnership
- Act Code: PA1890
- Jurisdiction: Singapore
- Current version status: Current version as at 27 Mar 2026
- Commencement: Not stated in the extract (note: the Act was made applicable by the Application of English Law Act (Cap. 7A) and subsequently revised)
- Key subject areas: Formation of partnership; partners’ authority and liability to third parties; internal relations and duties; dissolution and winding up
- Key sections (high-level): ss. 1–3 (definition and existence); ss. 5–18 (authority and third-party liability); ss. 19–31 (relations among partners); ss. 32–44 (dissolution and consequences); ss. 45–47 (interpretation and short title)
- Related legislation: Companies Act 1967; Application of English Law Act (Cap. 7A)
What Is This Legislation About?
The Partnership Act 1890 is Singapore’s core statutory statement of the law of partnership. In practical terms, it provides the legal framework for (i) when a partnership exists, (ii) how partners can bind each other and the firm when dealing with outsiders, (iii) how partners must behave towards one another, and (iv) what happens when a partnership ends—whether by notice, insolvency, illegality, or court order.
Although it is an “old” statute, it remains highly relevant because many commercial arrangements still involve unincorporated business relationships. The Act is particularly important where parties have not formalised their relationship in a way that clearly addresses authority, liability, profit-sharing, and exit consequences. The Act supplies default rules and clarifies legal concepts that courts and practitioners routinely apply.
At the same time, the Act draws a crucial boundary between partnerships and other business forms. For example, it expressly excludes relationships within registered companies (under the Companies Act 1967 or earlier company laws) from being treated as partnerships under the Act. This matters for determining whether statutory partnership rules apply at all, and therefore whether partners face personal liability or whether the corporate veil and company law regime govern.
What Are the Key Provisions?
1. Definition of partnership and the “business in common with a view of profit” test (s. 1)
Section 1 defines partnership as the relationship between persons carrying on a business in common with a view of profit. Two elements are central: (a) there must be a business carried on, and (b) it must be carried on in common with a view to profit. The Act also clarifies that members of a registered company or association are not treated as partners for the purposes of this Act.
2. Rules for determining whether a partnership exists (s. 2)
Section 2 provides evidential rules to help determine partnership existence. The statute is careful to prevent “labels” or superficial arrangements from automatically creating a partnership. Key points include:
- Ownership of property does not automatically create a partnership (joint tenancy, tenancy in common, joint property, common property, or part ownership do not of themselves create a partnership).
- Sharing gross returns is not enough to create a partnership by itself.
- Sharing profits is prima facie evidence of partnership—but not conclusive. The Act distinguishes between profit-sharing as an indicator of partnership and other profit-linked payments that do not necessarily create partnership liability.
Section 2 also lists several important “not a partner” scenarios, such as where a person receives a share of profits as repayment of a debt (liquidated amount by instalments), where remuneration of a servant/agent is structured as a share of profits, where a widow or child receives an annuity from a deceased partner’s profits, and where a lender receives interest varying with profits—provided the contract is in writing and signed by all parties. These carve-outs are frequently relied upon in disputes about whether a financier, contractor, or agent was actually a partner.
3. Authority of partners and binding effect on the firm (ss. 5–8)
A major practical function of the Act is to regulate how partners’ actions affect third parties. Under s. 5, a partner has power to bind the firm in the ordinary course of partnership business. s. 6 and related provisions elaborate that partners are bound by acts done on behalf of the firm. The Act also addresses situations where a partner uses the firm’s credit for private purposes (s. 7) and the effect of notice that the firm will not be bound by a partner’s acts (s. 8).
For practitioners, the key takeaway is that third parties may rely on the apparent authority of partners. Internal limitations on authority (for example, “Partner A cannot sign contracts above $X”) may not protect the firm against third-party claims if the third party had no notice of those limitations and the act falls within the ordinary course of business.
4. Liability to third parties: partners and the firm (ss. 9–12)
The Act sets out the liability regime for partners. s. 9 addresses liability of partners, while s. 10 addresses liability of the firm for wrongs. s. 12 provides that liability for wrongs is joint and several, which is significant: it means a claimant may pursue one partner or multiple partners, rather than being restricted to the firm alone.
In addition, the Act contains provisions dealing with misapplication of money or property received for or in custody of the firm (s. 11) and improper employment of trust property for partnership purposes (s. 13). These provisions are designed to address common wrongdoing patterns in partnerships—especially where partners handle client funds, trust property, or partnership assets and then divert them.
5. “Holding out” and admissions/representations (ss. 14–16)
Where a person is presented to the public as a partner, the Act can impose liability by “holding out” (s. 14). s. 15 addresses admissions and representations of partners, and s. 16 provides that notice to an acting partner is notice to the firm. These rules are critical in third-party disputes: they affect whether a claimant can rely on representations and whether the firm can argue that it did not receive proper notice.
6. Incoming and outgoing partners; continuing guaranties (ss. 17–18)
The Act addresses how liability changes when partners enter or leave. s. 17 deals with liabilities of incoming and outgoing partners. s. 18 concerns revocation of a continuing guaranty by change in firm. These provisions matter for drafting partnership agreements and for managing risk when the membership of the partnership changes.
7. Internal relations: property, accounts, and duties (ss. 19–31)
The Act also governs relations among partners. s. 19 permits variation of partnership terms by consent. s. 20 defines partnership property, while ss. 21–23 address property bought with partnership money, conversion of land held as partnership property, and procedure against partnership property for a partner’s separate judgment debt. s. 24 provides default rules as to interests and duties subject to special agreement.
Several provisions are particularly practitioner-relevant:
- Duty to render accounts (s. 28) and accountability for private profits (s. 29): partners must account and cannot secretly profit at the firm’s expense.
- Non-competition (s. 30): a partner has a duty not to compete with the firm, subject to the partnership agreement and the statutory default position.
- Expulsion and retirement (ss. 25–27): the Act provides mechanisms and presumptions for termination of a partner’s participation.
8. Dissolution and winding up (ss. 32–44)
The dissolution provisions explain how partnerships end and what follows. s. 32 covers dissolution by expiration or notice. s. 33 addresses dissolution by bankruptcy, death, or charge. s. 34 provides for dissolution by illegality of partnership. s. 35 allows dissolution by court.
For third parties, s. 36 protects persons dealing with the firm against apparent members of the firm. s. 37 gives partners the right to notify dissolution. s. 38 provides continuing authority of partners for winding up, and s. 39 addresses rights of partners as to application of partnership property.
The Act also includes rules on premium apportionment where dissolution is premature (s. 40), rights where dissolution is for fraud or misrepresentation (s. 41), and the outgoing or retiring partner’s share as a debt (s. 43). Finally, s. 44 sets a rule for distribution of assets on final settlement of accounts—an area that often becomes contentious in exit negotiations and litigation.
How Is This Legislation Structured?
The Act is structured in a straightforward sequence moving from formation to external relations, then internal relations, and finally dissolution. It begins with definitions and evidential rules (ss. 1–4), then addresses partners’ authority and liability to outsiders (ss. 5–18). It then turns to partners’ mutual rights and duties (ss. 19–31). The final substantive block deals with dissolution and its consequences (ss. 32–44). The Act concludes with supplemental provisions on interpretation and saving for equity and common law (ss. 45–46) and a short title (s. 47).
Who Does This Legislation Apply To?
The Partnership Act applies to persons carrying on a business in common with a view to profit who are not excluded by the Act’s company-related carve-out. It therefore applies primarily to unincorporated business arrangements—such as general partnerships and other relationships that, in substance, meet the statutory definition.
It also applies to third parties dealing with a partnership, because many provisions allocate risk between the firm and outsiders (for example, authority to bind the firm, holding out, and notice rules). The Act’s exclusion for registered companies means that where the relationship is properly within the Companies Act framework, partnership rules should not be used to impose partner-like liability.
Why Is This Legislation Important?
For lawyers, the Partnership Act 1890 remains important because it supplies default legal rules that govern partnership existence, authority, liability, and exit outcomes—even when parties have not fully documented their arrangement. In disputes, courts often look to the Act’s statutory tests (especially ss. 1–2) to determine whether a partnership exists and therefore whether personal liability attaches to individuals.
From a risk-management perspective, the provisions on binding authority and joint and several liability (notably ss. 5–12) directly affect how partners should manage signing authority, internal approvals, and communications with third parties. Similarly, the “holding out” and notice provisions (ss. 14–16) influence how firms should handle branding, representations, and dissolution announcements.
Finally, the dissolution and winding-up rules (ss. 32–44) are practically significant in commercial exits. They shape the legal consequences of termination, determine how partnership property is applied, and provide structured approaches to final settlement of accounts. Even where parties intend to settle amicably, the statutory framework often becomes the baseline for negotiation and, if needed, for litigation strategy.
Related Legislation
- Companies Act 1967
- Application of English Law Act (Cap. 7A)
Source Documents
This article provides an overview of the Partnership Act 1890 for legal research and educational purposes. It does not constitute legal advice. Readers should consult the official text for authoritative provisions.