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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Maldives
Islands 
