PARTNERSHIPS IN IRELAND BILL. (Hansard, 5 May 1819)

Mr. Plunkett
said, that the House were not, perhaps, aware that an act had existed upwards of forty years in Ireland, which had been acted on, and had become a part of the system of equity in that country, enabling persons to invest money in trade without becoming liable to the operation of the bankrupt laws. This was called an anonymous partnership in Ireland. These anonymuus partners, however, did not engage in the trade themselves, and had no control over it, but were mere lenders of money. But by the bill of the worthy alderman, the persons who advanced money might have the substantial control of the trade. Now he held this to be a dangerous principle. Persons might appoint an acting partner entirely under their control, and might, with little or no capital, have the entire benefit of the trade, with a limited responsibility to the public. This was directly contrary to an established principle of mercantile law. It was obvious, that under this bill men of straw would be appointed as acting partners, and the persons who had the entire control and direction of the trade would only be liable to the extent of the sums advanced by them. If an amendment of the existing law were only proposed, he should be heartily glad to accede to it; but the bill would go to repeal the existing law on the subject.

The Chancellor of the Exchequer
observed, that the principle of this bill was repugnant to the general principles of commercial law in this country. Ireland had separate laws on this subject, which were well understood, and which were not without their advantage in a country deficient in capital. In most countries on the continent, persons were allowed to vest sums in trade on a similar principle; but a system of this kind required to be acted on with great caution. Persons might acquire a false credit by a connexion of this nature with capitalists, the extent of whose liability might not be known to the public. In point of fact, this was an unlimited allowance of small joint stock companies; companies of such a description were viewed with great jealousy in this country. This jealousy, however, might be carried too far. He thought the bill might be productive of 126 advantage, but it should undergo considerable alterations.

§ Mr. Foster
entered into a history of the law in Ireland, respecting anonymous partnerships. It was drawn up, he said, by one of the ablest men of Ireland, and was passed in the Irish parliament in 1781. The idea of it was taken from a French law-book. When sent over to England; it was submitted to the attorney and solicitor-general of that day, and by their advice, rejected as contrary to the practice of this island. On a remonstrance from Ireland, that the bill was necessary for the encouragement of the manufactures of Ireland, it came back and was passed into a law, and had been productive of great benefit. He was sorry however to say, that there was as much necessity now for capital for encouraging manufactures in Ireland, as there was then. He should recommend to the worthy alderman to bring in a bill for amending the existing law, rather than to repeal it.

§ Mr. Leslie Foster
said, the bill of the worthy alderman was well deserving of the consideration of every Irishman. He was not sure that he understood his right hon. friend correctly. It seemed to him that his principal objection was, to a principle which already existed. By the existing law, dormant partners might invest money to any amount, derive a share of the profits, and yet not be liable beyond the sums invested by them.

Mr. Plunkett
said, his objection was, to the effective control which this bill would give to sleeping partners, without subjecting them to any losses.

Mr. Alderman Wood
acknowledged, that the principle of the bill would give this control; but then half the profits would remain to be added to the capital. Thus, if the profits were 10 per cent. 5 per cent could only be drawn by the partners.

§ Sir J. Newport
thought it would be better to repeal the former act, and to consolidate its provisions in the present, the former being an act of the Irish parliament. It would be better that all the regulations on the subject should be incorporated into one act of the imperial parliament.