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Partnership
Legislation.
8. Mr. Shatter asked
the Tánaiste and Minister for Enterprise, Trade and Employment the plans
she has to reform partnership law in view of the dramatic increase in the
number of partnerships and their importance in business and the fact that
the law is based on 19th century legislation; and if she will make a
statement on the matter. [21633/00]
Ms Harney:
This is an area that may
warrant review in terms of possible inadequacies in the Partnership Act,
1890, the Limited Partnerships Act, 1907 or the Investment Limited Partnerships
Act, 1994 and I will consider whether it is appropriate for referral to the
Company Law Review Group.
Mr. Naughten:
I urge the Minister to
ensure this matter is referred to the Company Law Review Group. Under the
current legislation, if a partner dies, his or her estate can force the
sale of the practice regardless of the profitability or damage that might
effect on the firm's goodwill. Where a partner is found to be negligent, no
proper procedures are in place to expel that partner and the partnership
must be dissolved. This is 19th century legislation and the Minister must
ensure that major changes are made to it. Partnerships comprise a huge part
of the service industry which has been criticised in the past in regard to
inflation and which requires a radical overhaul.
Ms Harney: In the event of a partner dying,
the situation to which the Deputy referred would only apply if no other
arrangements had been put in place. However, I share some of the Deputy's
concerns which are outlined in a recently published book written by
solicitor, Michael Twomey, and launched by the Attorney General.
The UK has introduced
legislation in this area but I must admit that until this question was
tabled and I read the background notes on the existing inadequacies, this
matter was not on the legislative priority list. I will consider the matter
and ask the Company Law Review Group for its opinion. Mr. Twomey suggests
that the number of partners should be limited to 20 and that mechanisms
should be put in place to resolve disputes between partners and to deal
with difficulties which might arise on the death of a partner if prior
arrangements have not been made. I thank the Deputy for tabling this
question and I will examine the matter.
Mr. Naughten:
Will the Minister confirm
that she will refer this matter to the Company Law Review Group and that it
will be given priority treatment there? There are situations in which the
20 partner limit is being circumvented through the establishment of two
partnerships of perhaps 20 partners each. These situations have not been
tested under the law and serious questions could arise. Will the Minister
review this matter urgently and ensure that legislation is introduced?
Ms Harney: I cannot say the matter is as
urgent as some others. Prioritising involves rating various matters in
order of urgency. My Department's first priority is the completion of the
company law enforcement legislation and the insurance legislation. The
proposals in the report of the audit review group will also require legislation
and existing company law must be consolidated in regard to co-operatives
etc. Some of the matters raised by the Deputy merit consideration. Mr.
Twomey's study deserves serious consideration by the Department and the
Company Law Review Group which advises the Minister on legislative changes
in this area on a biannual basis.
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