How To Set Up a Limited Company (And the Advantages and Disadvantages of Limited Company Status)

Thinking about setting up a limited company?

set-up-limited-company
Advantages and disadvantages of limited liability

Fancy the thought of becoming a company director? And majority shareholder?

But you’re not sure whether it is a good idea or whether you need to?

This piece will take a look at how to register a limited company in Ireland, the different types of limited company and, most importantly of all, the advantages and disadvantages of setting up a limited company.

Update 2015

The law in this area is due to change on 1st June, 2015 when the Companies act, 2014 comes into force.

To form a company, also known as setting up a company or incorporating a company, you will need to submit the following documents, along with the registration fee, to the companies registration office:

  1. Memorandum of association
  2. Articles of association
  3. Form A1

To carry out your company set up you can download the forms above from the companies registration office website at CRO.ie.

Rather than do it yourself though you can engage the services of a solicitor who will probably have formed many companies on behalf of clients. Your solicitor will also probably use a reputable company formation service which will make formation easier and less likely to cause any delays.

Memorandum of association

Your company set up will involve what’s called a memorandum of association.

This memorandum of association sets out the conditions upon which the company is granted incorporation. It must contain provisions dealing with certain matters e.g. the name and objects of the company and, if it is a company with limited liability, that fact must also be stated.

The memorandum of association must be in accordance with, or as near as circumstances permit, to the appropriate table in the First Schedule to the Companies Act 1963. It must be printed and divided into paragraphs and numbered consecutively.

Types of company

To set up a company in Ireland you must decide first which is the most appropriate type of company for your enterprise-

  1. Private company limited by shares Table B
  2. Company limited by guarantee and not having a share capital Table C
  3. Company limited by guarantee and having a share capital Table D
  4. Unlimited company Table E
  5. Public limited company Second Schedule of Companies (Amendment) Act 1983

Articles of association

Your company set up will also require the use of articles of association. The articles of association is a document which sets out the rules under which the company proposes to regulate its affairs.

Articles of association are required to be registered by a company limited by guarantee and having a share capital or an unlimited company. Articles of association must be printed and divided into paragraphs and numbered consecutively.

A company limited by shares or a guarantee company not having a share capital may register articles of association with the CRO. Model form articles of association are set out in the First Schedule to the Companies Act 1963.

Samples of memorandums and articles may be obtained from legal stationers, accountants, solicitors or company formation agent.

Form A1

Form A1 requires you to give details of the company name, its registered office, details of secretary and directors, their consent to acting as such, the subscribers and details of their shares. It incorporates a statutory declaration that the requirements of the Companies Acts have been complied with, and as to the activity which the company is being formed to engage in.

Applications for company set up can be submitted under any one of three schemes, each of which has a different customer service standard:

Ordinary: while there is no guaranteed service level, in practice it takes 15 working days.

Fé Phrainn: ten working days

Companies Registration Office Disk: five working days

Documents are processed in chronological order and are subject to checks.

Documents returned for correction are processed according to their date of re-submission to the companies registration office.

Statutory declarations sworn abroad will often require further legalisation.

The Advantages and Disadvantages of a Setting Up a Limited Company

If you are thinking of starting a business in Ireland you may be considering registering a limited company rather than trading as a sole trader or partnership.

 What are the advantages of setting up a limited company?

There are three broad advantages of registering a company with the Companies Registration Office (www.cro.ie).

Advantages of a limited company

Firstly a company has a separate and distinct legal identity from its member or shareholders. This allows it to enter into contracts, sue and be sued, and so on in its own right.

Secondly a company can live forever provided it is not liquidated or struck off the companies’ register-this is called perpetual succession.

Thirdly its potential liability is limited to its paid up share capital unless it is an unlimited company but the vast majority of companies in Ireland are private limited companies.

In theory this means that you as shareholder or member are protected from creditors and banks should the company cease.

In practice however you will find that many banks and suppliers will insist on personal guarantees from directors or shareholders.

Disadvantages of a limited company

The main disadvantage of setting up your own company are

  1. Cost, although this is minimal as you can incorporate a company for between €200 and €300;
  2. Filing financial statements every year with the Companies Registration Office with those details being open to public scrutiny.

On balance, despite the limitations on the concept of limited liability and protection from creditors, setting up a company is a smart move.

The alternatives of trading as a sole trader or partner in a partnership offer no protection from creditors and can leave you open to losing everything you own and bankruptcy.

Conclusion
Company set up in Ireland is a relatively straight forward process. The companies registration office are helpful and they have quite a lot of information on their website.

Sooner or later when forming your small business or even if you choose to work from home, you will have to carry out a company set up.

This need not be a complex task but one that should not be taken for granted.

You might also be interested in the 7 critical elements of a shareholders agreement.
By Terry Gorry
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How to Register a Business Name

register business name

Do you need to register a business name?

If so, how do you register a business name?

This piece will answer those questions and tell you what forms you will need to register a business name.

The registration of a business name is obligatory if any individual or partnership (whether individual or bodies corporate) or any body corporate carries on business under a name other than their own true names.

Specifically it is required if an individual uses a business name which differs in any way from his/her true surname.

It makes no difference whether the individual’s first name or initials are added. So the registration of a business name would be required if, for example, Mr. John Smith traded as “Smith Builders” but not if he traded as “Smith” or “John Smith”).

The registration of a business name would also be required if a firm uses a business name which differs in any way from the true names of all partners who are individuals and the corporate names of all partners which are bodies corporate.

It would also be required if a company uses a business name which differs in any way from its full corporate name; or

a person having a place of business in the State carries on the business of publishing a newspaper.

Requirements to Register a Business Name

The particulars for registration must be furnished within one month of the date of the adoption of the business name.

The forms of application for registration are:

  • Form RBN1: for an individual;
  • Form RBN1A: for a partnership;
  • Form RBN1B: for a body corporate.

The filing fee is €20 if you do it online.

Business name fees are set out here on the CRO website.

You should note that registration of a business name

1. does not give protection against duplication of the business name;

2. does not imply that the business name will necessarily prove acceptable subsequently as a company name;

3. does not authorise the use of the business name if its use could be prohibited for other reasons.

It should not for instance be taken as an indication that no rights (e.g. trade marks rights) exist in the name.

The companies registration office does not check proposed business names against names on the registers of companies or business names.

It is advisable, therefore, to investigate the possibility of others having rights in the name which it is proposed to use before incurring expenditure on business stationery, etc.

You can check the register of companies and register of business names for free using the companies registration office web search facility.

You can undertake a search of the trademark register at the Patents Office.

Requirements following registration of a business name

Certificate of registration

The registrar issues a certificate of registration for each business name registered. A copy of the certificate of registration must be exhibited in a conspicuous position:

  • in the case of a firm or individual at the principal place of business and in every branch office or place where business is normally carried on;
  • in the case of a body corporate, at its registered office in the State and in every branch office or place where business is normally carried on.

Business letters

The name(s) of the proprietor(s) of a business must be shown on all business letters, circulars etc. on which the business name appears.

If the proprietor of the business name is a body corporate the following additional information must be shown on business letters:

  1. The full name of the company (note that the only permitted abbreviation is “Ltd” for Limited, “PLC” for Public Limited Company, etc.);
  2.  The names and any former names of the directors and nationality if not Irish;
  3.  Additional particulars are required on letters and order forms for Irish registered companies (this does not apply to unlimited companies):
  4.  The place of registration (e.g. registered in Dublin, Ireland);
  5. the registered number (i.e. number of certificate of incorporation);
  6. the address of the registered office (where this is already shown on the document, the fact that it is the registered office must be indicated);
  7. if the company share capital is mentioned on the business letters and order forms, the reference must be to the paid-up share capital.

Registering changes

When a change occurs in any of the particulars of a registered business name (e.g. change of business name or business address) it should be notified to the registrar within one month of the date of the change.

The forms for notifying changes are as follows:

  1. Form RBN2: for an individual;
  2. Form RBN2A: for a partnership;
  3. Form RBN2B: for a body corporate.

Cessation of business name

When an individual, partnership or body corporate ceases to carry on business under a business name, a Form RBN3 should be filed in the companies registration office within three months after the business has ceased.

A fee does not apply to Form RBN3.

The form should be signed as follows:

  • Individual: by the individual. In the event of the death of an individual by the personal representative of the deceased;
  • Partnership: by all persons who were partners of the firm when it ceased to carry on business;
  • Body corporate: by a director or a liquidator.

Checklist for business name forms

In brief:

The appropriate fee must be lodged;

It is essential that the correct form be submitted at the time of application to register a business name.

The full name of the business must be given on all forms and forms must be dated.

Forms RBN1, RBN1A, RBN1B

The general nature of business must be completed;

The full address of the principal place of business must be stated, a PO box number will not suffice. An address outside the State is not acceptable;

The full date of adoption (i.e. day, month, year) of the business name must be given;

RBN1 : The form must be signed by the individual applying for registration;

RBN1A : The forename name and surname of every individual who is a partner in the firm together with the corporate name of every body corporate which is a partner must be given on the form. The form must be signed by either all the individuals who are partners and by a director or secretary of all bodies corporate which are partners, or by some individual who is a partner, or by a director or secretary of some body corporate which is a partner. In this case the form must be verified by a statutory declaration made by the signatory;

RBN1B : The form must be signed by a director or secretary of the company applying for registration.

Displaying the business name

Every business must paint or affix its business name on the outside of every office or place in which the business is carried on, even if it is a director’s home. The name must be both conspicuous and legible.

In addition, the company must state its business name, in legible lettering, on company letter heads, order forms, invoices, etc
By Terry Gorry
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Leasing a Commercial Premises? 10 Key Questions and 4 Vital Tasks for Your Solicitor

leasing-commercial-premises
Leasing commercial premises requires caution

Thinking about leasing a shop unit?

Coffee shop?

Office?

Other commercial premises?

If you are thinking about leasing a commercial shop unit in Ireland there are a number of key areas you need to consider before going ahead.

Set out below is a non-exhaustive list of issues that you will need to be satisfied about before investing your cash in a full repairing and insuring lease (FRI lease).

At the end of the piece I also deal with some common questions I am regularly asked by people looking to start or grow their business by taking on a commercial unit.

But before we look at the important questions there are 4 vital things to be taken care of-the conveyancing aspects of the lease. I have encountered a frightening number of tenants who entered into a lease for a commercial premises without using a solicitor.

A host of problems can then arise in relation to rent reviews, sub-letting, assigning the lease to someone else, etc. which the tenant may not have received any professional advice about when taking on the lease.

Don’t make this mistake. And here are some other issues your solicitor will need to take care of:

Conveyancing Considerations

a) Has the landlord title to grant the lease? Your solicitor should insist on seeing prima facie evidence, for example a copy of the deed to the landlord.

b) Is there planning permission?  Your solicitor needs to see proof that there is planning permission for the proposed use of the premises. He/she should also carry out a planning search.

c) Is the premises mortgaged? Your solicitor will need to check whether there is a mortgage on the premises. If there is the mortgagee may need to join in the lease as a party or give written consent to the granting of the lease.

d) Law Society standard pre-lease enquiries? Your solicitor will need to raise the standard pre-lease enquiries and requisitions with the landlord’s solicitor. These are standard queries-a check list essentially-which should be raised.

Once your solicitor has carried out these vital checks you, as proposed tenant, need to consider the following questions:

1) The term

How long will your lease be? Will you have statutory rights under the Landlord and Tenant (Amendment) Act, 1980? Will you have a break clause? Is Vat payable?

2) Repairs

Who is responsible for repairs? If it is a lease in excess of 5 years you as tenant will likely be responsible.
If it is a lease of less than 5 years you may only be responsible for internal repairs.

The question of whether it is a new building or an older building will also be significant and other issues to be addressed would include latent and inherent defects in the building, what is considered fair wear and tear and what risks are covered by insurance.

3) Insurance

If it is a full FRI lease then you as tenant will almost certainly have to pay the insurance premium held in your landlord’s name.
This will vary depending on whether you are the sole occupier of the building or if it is multi tenanted in which case you will be obliged to pay a proportion of the landlord’s premium.

You will therefore be concerned about the risks that the landlord is insuring against and whether the building is insured for reinstatement value or cost.

As tenant you will also want to insure against public liability, employers liability, plate glass and contents but this will depend very much on the nature of your business.

4) Alterations

You may need to make alterations when you take on the property to ensure that it is right for the purpose intended.
This will generally require the landlord’s consent which cannot be unreasonable withheld or delayed.

5) Alienation of the premises

Alienation is the legal term for your assignment of the lease to a third party; you will need the landlord’s consent to this but the landlord cannot unreasonably withhold or delay his consent.

However the question of reasonableness is one which might be disputed and the landlord may argue that his refusal is in the interests of “good estate management” and is therefore reasonable.

6) Service charges

Service charges may or may not arise in your particular circumstance. If there are service charges in respect of common areas you will need to ascertain exactly what is included and how much your service charges will be.

7) Rent reviews

How the rent will be reviewed will be of critical importance to you; generally rent reviews will take place at 5 yearly intervals and is an area that may require arbitration or some agreement as to how any disputes will be resolved.

8) Guarantee

Will you be obliged to provide a guarantee for rent, rates and other outgoings?

9) Break clause

Is there a break clause in the lease?

10) Stamp duty and VAT

You will be liable for the stamp duty on the lease but landlords also have an option to charge VAT or not. This is another area that you will want to check before investing as it can have a significant impact on your cash flow.

These are just some of the many factors you need to consider and be clear on before leasing a commercial premises.

Here are some questions that crop up repeatedly. If you have any questions simply send them in to me with the contact form below and I will answer them.

Stamp duty on commercial leases

If there is a premium payable stamp duty is payable on the premium at the normal non-residential stamp duty rate on a conveyance/transfer, that is, 2%.

Stamp duty is also payable on the rent as follows:

  • Lease not exceeding a term of 35 years: 1% of the average annual rent
  • Lease with a term between 35 and 100 years: 6% of the average annual rent
  • Lease with a term in excess of 100 years: 12% of the annual average rent

A rent review will also mean a fixed charge of €12.50, and each counterpart of an original lease attracts a fixed charge of €12.50

Commercial Premises F.A.Q.

‘How long should I sign a lease for?’

This very much depends on

  1. What you want and need
  2. What the landlord wants, needs, and is prepared to give you.

So, it depends on good, old-fashioned negotiation between you and the landlord, or his agent.

You need to consider your future needs and potential expansion/growth; however, you must also consider your business failing. It’s not a pleasant thought but you need to consider it. At least one break clause can give you a way out of the lease, and it could be exercised due to the growth and new needs of your business, or the failure of the business.

‘What documentation will I need?’

When you go to take a look at the premises to speak to the landlord and/or auctioneer, you don’t need any. Later on if you are going ahead, your solicitor will require some identification and anti money laundering papers, but initially when negotiating you don’t need anything.

‘What are my legal responsibilities (and the landlord’s)?’

Your main responsibilities will be to pay the rent, insurance, and any service charge. However, the location of your unit-for example in a shopping centre or multi unit development-may place some extra responsibilities on you. These will all be contained in your lease in the form of covenants and conditions; your landlord’s entitlements and obligations will also be found in the lease, and for this reason you need to negotiate a good one at the outset.

‘As the property is not finished it still needs toilets, railings walls plastered, staircases and a number of other unfinished works.  I am unsure as to what I should be asking them to finish as I don’t know what it is they will expect me to finish.’

This too is a matter for negotiation and agreement, and you want to be sure to avoid having to carry out a huge amount of renovations/refurbishments which may only benefit the landlord in the long run.

If there is work to be done, and the landlord undertakes to carry it out, get a surveyor or architect to check the work before signing a lease.

Your solicitor will also be looking for certificates of compliance with planning permission and building regulations from the landlord’s solicitor, but you need to be sure that the work is carried out to a satisfactory standard for your needs.
By Terry Gorry
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Why Some Partnerships End in Tears-What You Need to Know About Partnership Agreements

business-partnership

If you are thinking about going into business in a partnership, or perhaps you are already in a partnership, this piece will almost certainly be of interest to you.

Because partnerships can be difficult and quite often end in tears.

Written Partnership Agreement

The need for a written partnership agreement in any partnership is crucial. Because if you do not have one, then the Partnership act 1890 will govern your relations with your partner.

Partnerships are an important part of business life in Ireland for a number of reasons including taxation, accounting, and disclosure advantages over limited companies. There are other reasons too:

  1. any time 2 or more people come together to carry on business and do not form a company the law assumes they are in partnership. They are then subject to partnership law which dates back to the Partnership Act of 1890.
  2.  Professionals such as doctors, lawyers, dentists, vets, accountants are not allowed to form companies.
  3. There are advantages over forming a company from the point of view of tax, accounting and disclosure requirements.

Partnership Does Not Have a Separate Legal Identity

Unlike a company a partnership is not a separate legal identity. This means that partners have unlimited liability, unlike directors or shareholders in companies.

And partnerships do not have to go through any registration process to be formed.

The downside is that each partner is liable for the losses of his co-partner in carrying on the partnership business, even where the other partner has defrauded clients of the business.

Definition of Partnership

Partnership Act 1890 defines a partnership and states that where 2 or more people carry on business with a common view of profit, then a partnership exists.

A written partnership agreement is not necessary (but is strongly advised).

And where 2 or more companies come together to carry on business to make a profit then unless they have set up a special purpose joint venture company a partnership will be deemed to exist.

Co-Ownership of Property

Co-ownership of property alone does not mean that a partnership exists; there must be a sharing of any profits between partners.

Generally the maximum number of partners allowed is 20; however there are exceptions made for solicitors and accountants.

Types of Partnership

There are 2 types of partnership:

  1. an informal partnership (partnership at will) and
  2. formal partnership (fixed term partnership).

Written Partnership Agreement

If there is not a written partnership agreement you are leaving yourself wide open to difficulties.

Because if there is not either an implied or express agreement the partnership will be considered in the eyes of the law a partnership at will and will be governed by an act from 1890. In most cases this is wholly inappropriate for modern business.

For example without a written partnership agreement the 1890 Partnership Act will mean that:

1)  there is no right to expel a partner

2)  any partner may dissolve the partnership

3)  if a partner dies, the firm will automatically dissolve

4 ) there is no power to retire under the Partnership Act, 1890.

Business Name of Partnership

If the partnership is carried on under a name which does not consist of the surnames of the partners, then the partnership must register a business name and publish the names of the partners on the firm’s stationery.

In the event of a dispute, this may be very important as it may indicate when somebody became or ceased to be a partner.

Partners Rights under Partnership Act, 1890

  • every partner may take part in the management of the business so if this in not desired then a written agreement should reflect the wishes of the partners.
  • a simple majority of partners is all that is required to make a decision. Again if this is not desired then a written agreement is a must.

However this is tempered by the requirements that

a) all the partners must exercise their powers for the benefit of the partnership as a whole

b) there must be unanimity to change the partnership business

c) no partner may be introduced without the consent of all the partners

d) a partner may not be expelled by a majority.

Majority Rule in a Partnership

There are 2 restrictions on the capacity of partners to bind the whole partnership by a majority vote:

  1. partners have a fiduciary duty to each other and must exercise their rights for the benefit of the partnership as a whole
  2. sections 24 and 25 of the Partnership Act, 1890 limit the powers of partners to use majority rule.

Section 24 (8) requires unanimity for a change in the partnership business;

section 24 (7) provides that no partner may be introduced without the consent of all the partners

section 25 prohibits the expulsion of a partner by a majority of the partners unless all partners have expressly agree to such a power being conferred. However there is no right to expel under the default agreement situation.

Fiduciary Duty of Partners

A partner has a fiduciary duty to co-partners under common law.

However, the Partnership Act, 1890 also provides as follows:

section 28 provides that partners are bound to render through accounts and full information of all things affecting the partnership.

section 29 provides that a partner must account to the partnership for any profits made from partnership property.

section 30 provides that “If a partner, without the consent of the other partners, carries on any business of the same nature as, and competing with that of the firm, he must account for and pay over to the firm all profits made by him in that business.”

However this does not prevent a former partner from competing with the former partnership.

Considerations for a Written Partnership Agreement

It is pretty clear that having a written partnership agreement is crucial to the smooth running of the partnership and to ensure that the wishes of the partners at the outset are carried out.

The Partnership act 1890 does not prevent a former partner from competing with the firm after he leaves. For this reason it is common for modern partnership agreements to have a non compete agreement, generally for a maximum of 2 years.

Financial rights of partners

The default position from the 1890 act is that all partners are entitled to share equally in the profits and capital of the partnership and must contribute equally to the losses.

This means that even if a partner does not contribute capital in the same proportions as the other partners he is still entitled to share in the profits equally.

The 1890 Act also deals with interest on capital, interest on loans, remuneration of partners, and drawings.

Remuneration of Partners

The Partnership act 1890 states that no partner is entitled to remuneration for acting in the partnership business.For this reason a written agreement is advisable and should also set out the provisions for the drawings of partners.

Partnership Property

It is very important to decide at the outset which is partnership property and which belongs to individual partners.

It is important to note that the 1890 act presumes that property used in the partnership is partnership property and that property bought with partnership funds is partnership property.

So it should be clarified from the start who owns what; and what is partnership property and what is not.

Liability of partners to third parties

Partners are liable for the debts and obligations of the partnership without limitation.

And where a creditor cannot get money due to him from the partnership he is entitled to get his money from the partners personally.

Generally a partner acting within the scope of his authority binds the whole partnership legally. However he must act as a partner and it must be within the ordinary course of business of the partnership.

If a partner can wiggle his way out of binding his firm to an outsider then he himself will be made personally liable.

A partner can bind the partnership arising from his authority which may be

  • express authority
  • implied authority
  • ostensible authority.

However, the act must be done by a partner as partner of the partnership within the ordinary course of business of the partnership. If a partner was acting outside the partnership in a different capacity, she would not bind the firm.

Actions Between Partners

Rows and disputes between partners are, unfortunately, quite common.

Any litigation between partners will be strongly influenced by 2 factors:

  1. courts are reluctant to allow partners to sue other partners on foot of a single partnership obligation. Instead they tend to prefer that all partnership obligations be determined as part of a general settlement of accounts on the dissolution of the partnership;
  2. courts are reluctant to compel an unwilling partner to be a partner of another. Accordingly the specific performance of partnerships is only granted reluctantly and seldom.

Dissolution of Partnership

Dissolution of a partnership can occur by
1)  automatically eg on the death or bankruptcy of a partner

2 ) by notice (section 26 or 32 (c)  ie any partner can just dissolve the partnership by giving notice in the absence of any express or implied contrary agreement. The notice will take effect from the date set out in the notice, but this date cannot be before the date of receipt of the notice.

Once the partnership is dissolved, any partner can demand the sale of partnership assets in order to discharge the liabilities of the firm.

3)  illegality-partnerships formed to carry out an illegal activity or an activity contrary to public policy are automatically dissolved

4) by expiration-either at the end of the partnership term or on the completion of a specific undertaking for which the partnership was formed

5) dissolution by the court-section 35 provides statutory grounds for dissolution by a court including where

  • a partner is of unsound mind
  • a partner becomes permanently incapable of performing his part of the partnership contract
  • a partner’s behaviour is prejudicially affecting the partnership business
  • a partner is in breach of the partnership agreement
  • where the partnership can only be carried on at a loss
  • where it is just and equitable to dissolve the partnership.

Dissolution of Partnership by Court as a Remedy in a Dispute

The court can dissolve a partnership under section 35 of the Partnership Act, 1890 where it decides that

a)  a partner has carried on in a way that is damaging to the business

b)  where a partner commits a breach of the agreement consistently

c) whenever the court decides that is just and reasonable to dissolve it.

Courts can also appoint a receiver/manager to preserve partnership assets where it decides it is appropriate to do so.

Types of Partnership Dissolution

There are two types of dissolution of partnership:

  1. A general dissolution and
  2. A technical dissolution.

General Dissolution of Partnership

This occurs where the partnership is ended and the business is wound up and the partnership assets are sold. Section 39 of the Partnership Act, 1890 allows a partner to force the general dissolution of the firm.

Technical Dissolution of Partnership

A technical dissolution will occur where there is a change in partners, either by a partner leaving or a new partner joining the firm. The death or bankruptcy of a partner will also lead to a technical dissolution.

It will become a general dissolution if the remaining partners decide to sell the assets of the partnership and wind up the business.

No right to expel a partner

Under the Partnership act 1890 there is no right to expel a partner, no matter how negligent or unprofessional he is. This is another important reason to have a written partnership agreement drawn up.

Consequences of dissolution of Partnership

Where a firm goes into general dissolution the assets of the partnership will be sold to pay the debts of the partnership.

It is important to be aware that if there is insufficient funds to pay creditors then in the absence of an agreement to the contrary each partner will have to contribute equally to those losses; regardless of the contributions of capital by each partner at the outset.

In order for a partner to protect himself after dissolution he must give notice to all existing customers to avoid any liability after the dissolution.

It is vital that a former partner notifies customers of the partnership that he is no longer a partner or he could be held liable under the Partnership act 1890 for any obligations incurred by the partnership after his departure.

Any partnership agreement must provide for the share of the departing partner to be purchased by the continuing partners and must provide for what will occur on the death of a partner.

(NOTE: there are 2 other types of partnership recognised by Irish law which have not been considered here-a limited partnership and the investment limited partnership.)

You should consult a solicitor or other suitably qualified professional to have your partnership agreement drafted and which will provide for all of the issues outlined above.

You may also be interested in the problem with partnerships.
By Terry Gorry
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