PM132300 - Capacity of partners

It is not a requirement of partnership that each member is capable of performing the full range of the activities of the partnership business, but each must be capable of performing a part of the activities. The differing abilities of the parties may have made partnership desirable in the first place; see, for example, Fenston v Johnstone [1940] 23TC29. In that case arrangements for the joint purchase and development of land, with one party providing expertise and the other finance, were held to be a partnership. See also Newstead v Frost [1980] 53TC525 in which an entertainer entered into an agreement with a company to exploit his artistic talents and the court decided that there was a valid partnership.

Some professions may only be carried on by qualified persons (for example solicitors, dentists, and patent agents) so a non-qualified person may not become a partner. Some professional bodies permit partnership between qualified and non-qualified persons but will not allow such partnerships to describe themselves as ‘chartered’ for example accountants and surveyors. Others permit such partnerships provided the non-qualified members do not lay claim to qualifications they do not have or perform services they are not qualified to do, for example insurance brokers and general practitioners.