The relationship existing between two or more persons carrying on business in common with a view of profit: Partnership Act 1890 s.1. Business (qv) means a series of acts which, if successful, will produce profit or gain; it includes every trade, occupation or profession; PERSON (qv) means a legal person and includes human and artificial or corporate persons. There are rules in s.2 for determining if a partnership exists.
The essential difference between a partnership and a company is that the former has no legal personality, whereas a company is a body corporate. The property of a partnership firm belongs to the individual members; they are collectively entitled to it; whereas the property of a company belongs to the company. Creditors of a partnership firm are creditors of the members of the firm and on a judgment can levy execution on the property of the partners of the firm; whereas, judgment against a company ordinarily gives no right to levy execution against the members. A partner cannot contract with his firm, whereas a member of a company can contract with the company.
There are two types of partnership: the ordinary partnership which is governed by the Partnership Act 1890 and the LIMITED PARTNERSHIP (qv) formed under the Limited Partnership Act 1907. The ordinary partnership is an important feature in the State, particularly in the field of the professions; however very few limited partnerships are formed. There is now a very special type of LIMITED PARTNERSHIP; for details, see INVESTMENT LIMITED PARTNERSHIP.
The rights of partners, between themselves, are governed by the partnership agreement or contract or the deed of partnership or partnership articles, if any. Where members of a partnership set up business under the aegis of a company, the company has its own legal personality with its own rights and duties, together with the rights and duties of shareholders: Bayworld Investments v McMahon and Others [2003 HC] FL 8051. However, provision has been made recently to extend employment equality legislation to partnerships: Employment Equality Act 1998 s.13A inserted by Equality Act 2004 s.7.
A formal document is not necessary to create a partnership; there may be an implied partnership from the acts of the parties thereto: see Greenham v Gray  4 ICLR 501. The receipt by a person of a share in the profits of a business is prima facie evidence that he is a partner in the business, but the receipt of a share or payment contingent or varying with the profits does not of itself make someone a partner in a business: O’Kelly v Darragh  ILRM 309.
As regards taxation, each partner is taxed on the profits from his share of the partnership trade. See Taxes Consolidation Act 1997 ss.1007 - 1013. The right of limited partners and certain general partners to set off losses, interest and capital allowances of the partnership against non-partnership interest is restricted (ibid s.1013). The restrictions now apply also to non-active partners in partnerships generally: Finance Act 2000 s.70 amending s.1013. See Companies (Amendment) Act 1986 implementing the EC 4th Directive (Annual Accounts) and the 1992 Group Account Regulations now apply to partnerships with unlimited liability in which the members are themselves limited companies: EC (Account) Regulations 1993 (SI No 396 of 1993). See Copyright and Related Rights Act 2000 s.13. See Listing Rules (2014), para 7.8.9. See Industrial Designs Act 2001 s.7. See Macken v Revenue Commissioners  IR 302; Meagher v Meagher  IR 96; Williams v Harris  SC. See also RSC O.46 rr.3-4.
See “Equal Partners” by solicitor Ciaran O’Mara in Law Society Gazette (Apr 2004) 30. [Bibliography: Keane (1); O’Callaghan P; Twomey; Lindley (UK); Palmer (UK)]. See AUDIT; BARRISTERS, PARTNERSHIP OF; CONTROL; FIRM; LIMITED PARTNERSHIP; PRECEDENT PARTNER; PUBLIC PRIVATE PARTNERSHIP ARRANGEMENT; SOCIAL PARTNERS.
Murdoch and Hunt's Encyclopedia of Irish Law (MHEIL) is a fully interlinked and searchable legal database, designed to function as an aide memoire for busy practitioners. To add MHEIL to your subscription or to organise a free trial, click the button below. For more on partnership law generally, see Twomey on Partnership (2nd Ed).