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The Partnership
Act of Maldives 1996
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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