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EXECUTIVE MASTER IN MANAGEMENT - LEGAL FRAMEWORK FOR MANAGERS

Suggested Answer – Question 1(a):

Partnership In Malaysia
The main law governing partnership in Malaysia is the Partnership Act 1961.
Partnership is defined in Section 3(1) of the Partnership Act 1961 as:
“Partnership is the relation which subsists between persons carrying on business in common with a view of profit”.
One of the essential ingredients of partnership are there must be more than 1 person, and shall not exceed 20 persons to constitute a partnership.
*In the case of Tan Teck Hee v Cheng Tien Peng [1915] 2 FMSLR 161, it was held no partnership which has a membership exceeding 20 can maintain an action as such formation was forbidden by law and therefore parties were not entitled to enforce any claim.
*The business must be carried on in common. In the case of Choi Siew Cheong v. Lucky Height Development (1995), it was held that there is not partnership in this case because the intention of the parties was that of separate businesses.
*The partnership must be formed with a view of profit. In the case of Gulazam v. Noorzaman and Sobath, the parties agreed among themselves to form a partnership of buying and selling cattle an agreed to share the profit. The court held that all essential elements including ‘with a view of profit’ were present to constitute a partnership.
Partnership must be registered under the Registration of Business Act 1956 and partnership can be formed with or without a written agreement. The general rule is that anyone with a ‘sui generis’, i.e. legal capacity is able to enter into a partnership.

Relations Of Partners To Persons Dealing With Them
As describe in the Part III Partnership Act 1961 - Section 7 of the Partnership Act 1961 - Power of partner to bind firm states that “every partner is an agent of the firm and his other partner for the purpose of the business of the partnership; and the acts of every partner who does any act for

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