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Title
1- (a)This Act shall govern the formation,
registration and operation of partnerships
in Maldives.
(b) This Act shall be cited as “Partnership
Act of Maldives”
Partnership
2- (a) A partnership may be registered
as prescribed under this Act to carry on
a business for profit in a manner that does
not contravene the principles of Islamic
Shariah, the laws and regulations of the
Republic of Maldives.
(b) A partnership is a business association
of two or more persons to carry on as co-owners
a business for profit and bearing a separate
name.
(c) Companies registered under the Companies
Act and any company created by a separate
law or a presidential decree shall not be
a partnership under this Act.
Registration
3- (a) Any persons desiring to form a partnership
shall prepare and execute a partnership
agreement and shall submit the same to the
Ministry of Trade and Industries. The partnership
agreement shall be executed in the presence
of at least two witnesses and the witnesses
shall also sign on the agreement.
(b) A partnership will be registered upon
the payment of the registration fee of Mrf.2000/-
and the annual fee as stipulated in section
4(a) below.
(c) The date on which the partnership came
into existence shall be deemed to be the
date stated on the certificate of registration
of the partnership issued by the Ministry
of Trade and Industries.
Annual Fee
4- (a) All partnerships shall pay an annual
fee of Mrf.2000/- to the Ministry of Trade
and Industries before the end of the month
of February each year.
(b) Where a partnership has failed to pay
the annual fee before the end of February
that year such fee in arrears shall be accepted
with a fine of Mrf.300/-. If such fee has
not been paid before the end of March together
with the fine such fee will be accepted
in April with a fine of Mrf.1000/- . If
the annual fee together with the fine is
not paid before the end of April together
with the fine, the partnership will be terminated
and deleted from the registry.
Carrying on business before registration
5- No business shall be carried on in the
name of the partnership prior to the registration
of the partnership. Where any business is
carried on before the registration of the
partnership, the person or persons who did
the act will be liable for it.
Carrying on a business not included
in the objectives of the partnership
6- Neither the partnership nor any partner
shall engage in any activity not included
in the objectives of the partnership stipulated
in the partnership agreement. If a partner
or some partners have carried on an activity
not included in the objectives of the partnership,
neither the partnership not the other partners
who have not participated in such activity
shall be liable for such. And the liability
shall fall on the partner or the partners
who carried out such activity.
Number of partners
7- Partnership shall consist of at least
two members. The number of partners in the
partnership shall not exceed twenty.
Name of the partnership
8- The name of the partnership will be
registered if the proposed name is made
up of the name of the partners or some of
the partners of the partnership with the
words “and partners” or similar
word or if at the end of the name of the
partners the business carried by the partnership
is indicated.
Contents of the partnership agreement
9- Partnership agreement of all partnerships
shall include the following.
(a) name of the partnership
(b) registered address of the partnership
(c) the period, if the partnership is established
for a fixed term
(d) objectives of the partnership.
(e) name of the partners and their addresses
(f) capital of the partnership, and the
share of each partner of the partnership
(g) how the profit and loss is to be shared
(h) name of the managing partner
(i) how a person may be admitted to the
partnership, removed from the partnership,
and leave the partnership.
(j) Other requirements laid down by the
rules made hereunder.
Status of partners
10- (a) For the purposes of the business
of the partnership every partner shall be
an agent of the other partners of the partnership.
Anything done by a partner in the ordinary
course of the business of the partnership
shall bind the other partners.
(b) If a partner has entered into a transaction
with a third person in a matter in which
he has no authority to act for the partnership
in the particular matter, and where such
absence of the authority is known to the
third person and where the third party did
not know that the person he is dealing with
is a partner of the partnership then the
other partners shall not be held liable
as mentioned in clause (a) above.
Liability of the partners
11- (a) All the partners shall be jointly
and severally liable for all the debts and
other liabilities of the partnership incurred
during the time they are partners of the
partnership.
(b) Any person who has been admitted to
the partnership shall not be liable for
things done by the partnership before his
admission into the partnership as a partner.
(c) A person shall not be excluded from
the liability incurred by the partnership
while he was a partner of that partnership,
even after he has left the partnership.
(d) Where a partner has expended the partnership’s
money for a purpose other than those of
the partnership without the permission from
the other partners, such expenditure shall
be a liability of such partner and no liability
shall fall on other partners.
Holding out
12- (a) Where any person by word or deed
represents to be a partner of a partnership
or where a person by knowing that a partnership
has represented him as a partner and then
keeps silent, such person shall be liable
as if he is a partner of that partnership.
(b) Where the partnership’s name
includes the name of a deceased partner
and the partnership has carried out its
business without changing the partnership’s
name, the heirs of the deceased partner
shall not be liable for any debts of the
partnership incurred after the death of
such partner.
Admission and removal of partners
13 (a) A partner shall be admitted to and
removed from the partnership in the manner
stipulated in the partnership agreement,
the provision of this Act and any regulations
made hereunder.
(b) No partner shall be removed from the
partnership except in the manner stated
in the partnership agreement.
(c) A partner may include any other person
in his share in the partnership. However,
no person may be admitted to the partnership
except in the manner stipulated in the partnership
agreement. Where a partnership has admitted
a new partner or partners the names of such
partners shall be sent to the Ministry of
Trade and Industries.
Sharing of profit and loss
14- Profit and loss of the partnership
shall be shared among the partners in the
proportion in which the partners have contributed
money or some service rendered towards the
capital of the partnership and in the manner
stipulated in the partnership agreement.
Management of the partnership
15- Every partnership shall be managed
by the managing partner of the partnership
in accordance with the partnership agreement.
Competing against the partnership without
consent of the other partners.
16- Where a partner has engaged in a similar
business carried out by the partnership
without the consent from the other partners
all the profits so generated shall belong
to the partnership.
Partnership property
17- All the assets and money acquired in
the course of the business of the partnership
shall belong to the partnership. And all
the money and assets of the partnership
shall be used for the purposes of the partnership
in the manner stipulated in the partnership
agreement.
Books of the partnership
18- All books of the partnership shall
be kept in the office of the partnership
in a manner that they could be inspected
by the partners.
Assignment of partnership interest
19- Unless otherwise stated in the partnership
agreement, a share of a partner can be assigned
to a person other than to an existing partner
with the consent of all other partners.
Dissolution of the partnership
20- Unless, otherwise agreed between the
partners the relation between a partner
and the other partners will terminate by
the occurrence of the death of such partner
or bankruptcy. And that shall not affect
the relationship between the surviving partners
and those unaffected by bankruptcy.
Winding up
21- A partnership may be wound up in accordance
with the partnership agreement, this Act
and any regulation made hereunder.
Some events leading to dissolution
of the partnership
22- A partnership will come to an end on
the occurrence of the following events.
(a) if the partnership was created for
a particular period, the expiry of such
period.
(b) If the partnership was created for
a particular project or task, the end of
such project or task.
(c) Agreement between the partners to dissolve
the partnership in accordance with the partnership
agreement.
(d) A law has prohibited the business being
carried out by the partnership, or a law
has prohibited the partners from carrying
out the business being carried on by the
partnership.
(e) Court has ordered the dissolution of
the partnership.
Dissolution of the partnership
by decree of the court upon a request made
by a partner
23- Where a partner has filed a petition
in the court to dissolve the partnership,
the court has the power to order the dissolution
of the partnership in the following situations.
(a) Where a partner of the partnership
is proved to be a lunatic.
(b) Where a partner has become permanently
disable to perform his function as a partner.
(c) Where a partner has committed an offence
that would cause a substantial loss to the
partnership taking into consideration the
entire business being carried only the partnership.
(d) Where a partner has purposely or repeatedly
breached the partnership agreement or it
has become difficult to carryon the business
of the partnership by having a partner in
the partnership.
(e) Where the business of the partnership
could not be carried except for causing
loss
(f) Where the court finds that the dissolution
of the partnership is just.
Penalty
24- Where any person has acted in contravention
to any provision of this Act the Ministry
of Trade and Industries have the power to
levy a fine of 5000/- to 15,000/- Rufiyaa
considering the gravity of the contravention.
Regulations
25- All the regulations to be made for
the purpose of implementing this law shall
be made by the Ministry of Trade.
Existing partnerships
26- All the partnerships existing at the
time of this Act taking effect shall be
registered under this Act within 6 months
from the date this Act enters into force.
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