HL Deb 10 July 1907 vol 177 cc1571-5

House in Committee (according to Order.)

[The Earl of ONSLOW in the Chair.]

Clauses 1 to 3 agreed to.

Clause 4: —

THE EARL OF GRANARD

said the object of the Amendment standing in his name to this Clause was to bring the Bill on all fours with the Companies Act, in which it was enacted that a partnership carrying on the business of banking could not consist of more than ten persons, and in the case of general concerns of not more than twenty persons.

Amendment moved— In page 1, line 22, after the word ' partnership,' to insert the words' shall not consist, in the case of a partnership carrying on the business of banking, of more than ten persons, and, in the case of any other partnership, of more than twenty persons.'" — (The Earl of Granard.)

On Question, Amendment agreed to.

Drafting Amendment agreed to.

LORD AVEBURY

moved to amend sub-section (2)— A limited partnership must contain one or more persons called general partners, who shall be liable for all debts and obligations incurred in the usual course of the partnership business by or on behalf of the firm, etc., by omitting the words "incurred in the usual course of the partnership business by or on behalf." It was thought that the words as they stood might sometimes raise unnecessary and difficult questions.

Amendment moved— In page 1, lines 24 and 25, to leave out the words' incurred in the usual course of the partnership business by or on behalf.'"—(Lord Avebury.)

THE EARL OF GRANARD

accepted the Amendment.

On Question, Amendment agreed to.

LORD AVEBURY

moved to amend the latter half of the same sub-section, which provided that the one or more persons to be called limited partners— shall at the time of entering into such partnership contribute, or undertake to contribute, thereto a sum or sums as capital or property valued at a stated amount, and shall not be liable for the debts or obligations of the firm beyond the amount so contributed or to be contributed, by omitting the words "or undertake to contribute." He said that these words were not to be found in any of the foreign codes, and they were objected to by many good judges.

Amendment moved— In page 2, line 1, to leave out the words 'or undertake to contribute.'"— (Lord Avebury.)

THE EARL OF GRANARD

said the Board of Trade did not oppose the Amendment if the noble Lord desired to press it. He pointed out, however, that uncalled liability had been a source of strength in this country in banking and limited liability concerns.

LORD AVEBURY

agreed, but said it would facilitate the passing of the Bill if the words were omitted.

On Question, Amendment agreed to.

THE EARL OF GRANARD

had an Amendment to Sub-section (3), which ran— (3) A limited partner shall not during the continuance of the partnership draw out or receive back any part of his contribution, and if he does so draw out or receive back any such part shall be liable for the debts and obligations of the firm as if he had agreed to contribute the amount so drawn out or received back, in addition to the sum (if any) which he is liable to contribute independently of this provision. He moved to insert, after the word "partnership," the words "either directly or indirectly," the object being to prevent a limited partner receiving back by way of loan any of the money he had invested in a limited partnership.

Amendment moved— In page 2, line 6, after the word 'partnership,' to insert the words 'either directly or indirectly.'"—(The Earl of Granard.)

On Question, Amendment agreed to.

THE EARL OF GRANARD

moved the insertion of a now sub-section to enable a body corporate to become a limited partner.

Amendment moved— In page 2, line 13, after the word 'name,' to insert as a new sub-section:'(5) A body corporate may be a limited partner.'"—(The Earl of Granard.)

On Question, Amendment agreed to.

Clause 4, as amended, agreed to.

Clause 5 agreed to.

Clause 6: —

THE EARL OF CAMPERDOWN

said the object of his Amendment to Clause 6 was to give to a limited partner power to have an audit of the accounts, which was obviously a matter of very great interest and importance to him.

Amendment moved— In page 2, line 21, after the word 'thereon,' to insert the words' and he may also require that the said books shall be audited by a person who publicly carries on business as an accountant.'"—(The Earl of Camperdown.)

THE EARL OF GRANARD

said the Board of Trade were very much opposed to the insertion of these words, as a limited partner was already fully safeguarded. He could inspect the books of the company with an agent, and there was nothing to prevent the agent being an accountant. Moreover, a limited partner could make any arrangement he liked before investing his money. If the Amendment were accepted, the result would be that the expense of the audit would fall on the partnership.

LORD JOICEY

supported the Amendment. He thought it desirable that the limited partner should have the power of insisting that the books should be audited by a public accountant. The cost of the audit was not a serious matter, and he hoped the Board of Trade would withdraw their opposition.

THE LORD CHANCELLOR (Lord Loreburn)

said that already a limited partner could, by himself or his agent, from time to time inspect the books of the firm. If he liked to employ a public accountant for the purpose the clause as it stood enabled him to do so. Anyone who was at liberty by his agent to examine the books could get an audit made, and the only question was whether he should pay for it himself or be able to impose it on the partnership. He thought the limited partner should pay for it himself.

Amendment, by leave, withdrawn.

THE EARL OF GRANARD

moved to delete Clause 6, and to insert a new clause which had been suggested by Lord Lindley.

Amendment moved— To leave out Clause 6, and to insert the following new clause: —6. — (1) A limited partner shall not take part in the management of the partnership business, and shall not have power to bind the firm; provided that a limited partner may by himself or his agent at any time inspect the books of the firm and examine into the state and prospects of the partnership business, and may advise with the partners thereon. If a limited partner takes part in the management of the partnership business he shall be liable for all debts and obligations of the firm incurred while he so takes part in the management as though he were a general partner. (2) A limited partner shall not be entitled to dissolve the partnership by notice. (3) A limited partnership shall not be dissolved by the death or bankruptcy of a limited partner, and the lunacy of a limited partner shall not be a ground for dissolution of the partnership by the Court unless the lunatic's share cannot be otherwise ascertained and realised. (4) In the event of the dissolution of a limited partnership its affairs shall be wound up by the general partners unless the Court otherwise orders. (5) Subject to any agreement expressed or implied between the partners— (a) Any difference arising as to ordinary matters connected with the partnership business may be decided by a majority of the general partners, (b) A limited partner may, with the consent of the general partners, assign his share in the partnership, and upon such an assignment the assignee shall become a limited partner with all the rights of the assignor, (c) The other partners shall not be entitled to dissolve the partnership by reason of any limited partner suffering his share to be charged for his separate debt, (d) A person may be introduced as a partner without the consent of the existing limited partners. (e)Applications to the Court to wind up a limited partnership shall be by petition under the Companies Acts, 1862 to 1900."—(The Earl of Granard.)

LORD AVEBURY

expressed his indebtedness to Lord Lindley. The new clause was an improvement.

On Question, Amendment agreed to.

Clause 7 agreed to.

Clause 8: —

Drafting and verbal Amendments agreed to.

Clause 8, as amended, agreed to.

Clause 9: —

Drafting Amendments agreed to.

Clause 9, as amended, agreed to.

Clause 10: —

Drafting Amendments agreed to.

Clause 10, as amended, agreed to.

Clause 11: —

Verbal Amendment agreed to.

Clause 11 as amended, agreed to.

Remaining clauses agreed to.

Standing Committee negatived. The Report of Amendments to be received on Tuesday next; and Bill to be printed as amended. (No. 105.)