Partnerships Act, 2010

This section provides definitions for terms used in the Act (for example "business", "court", "Minister", "minor", "partnership", "trustee").

Defines 'partnership' as the relationship among persons (not exceeding twenty) carrying on a business in common for profit; if formed to carry on a profession the partners (professionals) shall not exceed fifty.

Receiving a share of a business's profits is prima facie evidence of being a partner, but such receipt (or certain other payments) alone does not make a person a partner.

Firms using business names that do not show the true surnames of individual partners and corporate names of corporate partners must register that name under the Business Names Registration Act.

A minor may be admitted to partnership benefits but is not personally liable for the firm's obligations; the minor's share in firm property is liable for firm obligations.

A person admitted to partnership as a minor becomes liable for all partnership obligations incurred from their admission once they attain majority, unless they publicly repudiate within a reasonable time.

The firm is liable for loss, injury or penalty caused by a partner acting in the ordinary course of the firm's business or with the authority of co-partners, to the same extent as that partner.

A partner is jointly and severally liable with co-partners for all liabilities of the firm under section 14 while the person remains a partner.

A firm must make good any loss when money or property of a third person received by the firm or received by a partner within apparent authority is misapplied.

Other partners are not liable for trust property improperly employed by a partner who is a trustee, except where a partner had notice of a breach of trust; beneficiaries may recover trust money from the firm if the firm still has it.

A person who represents themselves as a partner (or allows themselves to be represented) is liable as a partner to anyone who gives credit to the firm on that representation; a firm is not liable for acts of someone who falsely holds out as a partner; executors or administrators are not automatically liable for debts after a partner’s death merely because the firm name is continued.

An admission or representation by any partner about partnership affairs, made in the ordinary course of business, is evidence against the firm.

Notice given to a partner who habitually acts in the partnership business counts as notice to the entire firm, except where the notice concerns fraud on the firm committed by or with that partner's consent.

Incoming partners are not liable to the firm’s creditors for acts before admission; retiring partners remain liable for debts incurred before retirement but may be discharged by agreement or take an indemnity from the newly constituted members.

A continuing guarantee given to a firm or to a third person is revoked for future transactions if the firm’s constitution changes or if the transaction changes, unless there is an agreement to the contrary.

A partner who acts in the ordinary course of the firm's business can bind the firm and the other partners, unless acting without authority in that matter or where the third party knows of the lack of authority or does not regard the actor as a partner.

If a person authorised to bind the firm does an act or executes an instrument relating to the firm's business in the firm name or otherwise showing intent to bind the firm, that act binds the firm and all partners.

If a partner pledges the firm's credit for a purpose apparently unrelated to the firm's ordinary business, the firm is not bound unless that partner was specially authorised by the other partners.

If partners agree to restrict a partner's power to bind the firm, acts that violate that agreement are not binding on the firm for persons who have notice of the agreement.

Partners are jointly liable for firm debts incurred while partners; an individual partner's estate is severally liable on death but only after paying separate debts; such an estate (or an estate after bankruptcy or certain retirements) is not liable for partnership debts contracted after the relevant date.

Partners may vary their mutual rights and duties by the consent of all the partners; consent may be express or inferred.

Partnership property is property brought into or acquired for the partnership; it must be held and applied by the partners exclusively for partnership purposes and in accordance with the partnership agreement, except that the legal estate or interest in land belonging to the partnership devolves according to the nature and tenure of the land and general rules of law.

Unless there is a contrary intention, property bought with money belonging to the firm is treated as bought on account of the firm.

When land or an interest in it becomes partnership property it is to be treated as personal (not real) estate between the partners and between heirs/executors, unless the contrary intention appears.

The court may, on application by summons of a judgment creditor of a partner, order that a partner’s interest in partnership property be charged to pay the partner’s judgment debt, appoint a receiver of that partner’s share of profits and direct accounts; other partners may redeem the charged interest or buy it on sale.

Sets rules for partners’ interests, duties, management rights, profit and loss sharing, indemnity, interest on advances, remuneration, admission of new partners, decision-making, and access to partnership books.

A majority of the partners have no power to expel any partner unless express agreement confers that power.

A partner wanting to end an un-fixed-term partnership must give reasonable notice and obtain the other partners' consent; if consent is refused the partner may retire; written notice per the deed suffices where applicable; the retiring partner's rights, benefits and duties are as agreed subject to the Act.

If a fixed-term partnership continues after the term expires without a new agreement, partners keep the same rights and duties as at the term's expiration.

Every partner must render true accounts and full information of all things affecting the partnership to any partner or their legal representatives.

Every partner must account to the firm for any benefit they derive without the consent of the other partners from partnership transactions or from using partnership property, name or business connection.

A partner who, without the other partners' consent, carries on a competing business must account for and pay to the firm all profits from that business.

An assignee of a partner's share may not interfere with management, require partnership accounts, or inspect books during the partnership; the assignee is entitled only to the assignor's share of profits (and must accept the partners' agreed account of profits); on dissolution the assignee is entitled to the assignor's share of assets and an account from the date of dissolution.

A partnership is dissolved on (a) expiry of a fixed term, (b) termination of a single adventure or undertaking, or (c) by agreement of the partners for partnerships of undefined duration.

A partnership may be dissolved by the other partners if a partner dies or is bankrupt, or if a partner's share of partnership property is charged for their separate debt, subject to any agreement among partners.

A partnership is dissolved whenever an event occurs that makes it unlawful for the firm’s business to continue or for its members to carry on business in partnership.

A partner may apply to the court to dissolve the partnership; the court may decree dissolution where specified grounds exist.

A person who deals with a firm after a change in its constitution may treat apparent members of the old firm as still members until they have notice of the change; an advertisement in the Gazette by any partner counts as notice for persons who had no prior dealings; and the estate of a partner who dies, becomes bankrupt, or (in certain retirements) retires is not liable for partnership debts contracted after that date.

On dissolution or retirement any partner may publicly notify the dissolution or retirement and may require the other partner(s) to concur in necessary or proper acts that cannot be done without their concurrence.

After dissolution partners retain authority to bind the firm to wind up partnership affairs and finish unfinished transactions, but the firm is not bound by acts of a partner who becomes bankrupt (subject to liability for persons representing themselves as partners after the bankruptcy).

On dissolution, every partner is entitled to have partnership property applied to pay firm debts and then the surplus applied to partners after deducting amounts owed; partners or their representatives may apply to court to wind up the firm on termination.

The court may order repayment (in whole or in part) of a premium paid by one partner to another when a fixed-term partnership is dissolved early, except in specified circumstances.

When a partnership is rescinded for fraud or misrepresentation by a party, the party entitled to rescind has three rights: a lien or retention of surplus assets to cover purchase payments and contributed capital; to stand in the creditors' name for payments made on partnership liabilities; and to be indemnified by the person guilty of the fraud or representation against all firm debts and liabilities.

An outgoing partner (or their estate) can claim a share of profits made after dissolution and interest, unless the surviving partners duly exercise a contractual option to buy the outgoing partner’s interest.

Continuing or surviving partners owe (must pay) the amount due to an outgoing partner or to representatives of a deceased partner for that partner’s share, subject to any agreement between the parties; the amount accrues at the date of dissolution or death.

When partners settle accounts after a partnership is dissolved they must apply the firm's assets in a specific order: pay losses (first from profits, then capital, then partners individually if necessary); pay debts to non‑partners; repay partners' advances rateably; repay partners' capital rateably; and divide any remaining residue among partners in profit‑sharing proportions.

Establishes that a limited liability partnership (LLP) may be formed, limits LLP membership to not more than twenty persons, requires general and limited liability partners with prescribed roles and capital contributions, prohibits limited liability partners from withdrawing their contributions during the partnership, and permits a body corporate to be a limited liability partner.

A limited liability partnership must be registered with the Registrar in accordance with section 50; if not registered it is treated as a general partnership; a registered LLP must add “(LLP)” to its name.

The Registrar may, on written application, reserve a name pending registration of a limited liability partnership; reserved names last thirty days or up to sixty days if the Registrar permits for exceptional reasons; while reserved the Registrar must not register any other business with that name; the Registrar must not reserve or register names or partnerships it considers undesirable or deceptive.

To register a limited liability partnership, the partners must deliver a signed statement with specified particulars to the Registrar; the Registrar must issue a certificate upon receipt of those particulars and the prescribed fee.

A limited liability partnership must register specified changes in its particulars; failure to do so is an offence and each general partner may be fined up to 0.5 currency points per day on conviction.

Limited liability partners generally must not take part in management or bind the firm; they may inspect firm books after giving seven days' notice; if they take part in management they are liable for firm debts incurred while managing.

Defines when a limited liability partnership is deemed unable to pay its debts (including when indebted in a sum exceeding one hundred currency points) and states that a limited liability partnership shall not be wound up under the Act in specified circumstances.

A notice of any arrangement or transaction under which a general partner becomes a limited partner, or a limited partner’s contribution is assigned, must be advertised in the Gazette immediately before it takes effect.

A person may inspect statements filed with the Registrar by a limited liability partnership on payment of a fee (not exceeding 0.5 of a currency point as prescribed); and may obtain a certified copy or extract of the certificate of registration on payment of a certification fee (not exceeding one currency point as prescribed).

Section Conversion of partnerships Section A limited partnership may be converted into a general partnership by surrendering the certificate of its registration to the Registrar for cancellation. The Registrar shall, within fourteen days

Conversion of a partnership from one form to another does not affect pending court actions against the converting partnership, and those actions may be continued as if the conversion had not occurred.

Provisions governing winding up of an unregistered company under the Companies Act apply, with necessary modifications, to winding up a partnership under this Act.

Postponement of share of profits in case of bankruptcy

Rules of equity and common law that apply to partnerships are treated as applying to partnerships in Uganda, except where they conflict with this Act.

The Minister may, by statutory instrument, make regulations prescribing fees, forms and other matters for carrying out this Act; those regulations may provide that contraventions are punishable by a fine not exceeding forty eight currency points, or imprisonment not exceeding two years, or both.

The Minister may amend the Schedule to this Act by statutory instrument with the approval of the Cabinet.

The Partnership Act, Cap. 114, is repealed.