Partners' private profits accountability — PA 1890 s. 29
Account for private profits from partnership dealings or use of firm's name/property without consent. Applies after dissolution by death until winding up.
Every partner must account to the firm for any benefit derived by him without the consent of the other partners from any transaction concerning the partnership, or from any use by him of the partnership property name or business connexion. This section applies also to transactions undertaken after a partnership has been dissolved by the death of a partner, and before the affairs thereof have been completely wound up, either by any surviving partner or by the representatives of the deceased partner.
Text in force at .
Source: legislation.gov.uk — The National Archives (legislation.gov.uk), reproduced under licence Open Government Licence v3.0.
What it actually says
This section says a partner must hand over to the partnership any gain they get from a partnership-related deal or from using the partnership's property, name, or business connections, unless the other partners agreed to it first.
The rule also applies after a partner dies and the partnership is being wound up, while the surviving partner or the deceased partner's representatives are still finishing the partnership's affairs.
When it applies
- A partner uses the firm's client list to win business for his own separate company and pockets the commission without telling the other partners.
- A partner buys a property with partnership money but puts it in her own name and keeps the rental income.
- After a partner dies, the surviving partner completes a deal the deceased had been working on and takes the profit for himself before the firm is wound up.
- A partner uses the partnership's trade name to secure a contract for a side business and keeps the earnings.
What this section does not say
- It does not cover profits from a completely separate business that has no link to the partnership, even if the partner uses personal time or skills – that may be covered by s.30 (duty not to compete).
- It does not set how much profit must be shared; that depends on the partnership agreement or s.24.
- It does not apply when the other partners have given their consent to the profit-making activity.
- It does not apply to benefits obtained after the partnership has been fully wound up.
Related sections
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This page reproduces the text of PA 1890 s. 29 in force at the date shown and explains it in general terms. It is not legal advice and takes no account of the circumstances of your case, which can change the answer completely. For a live dispute, for limitation periods, and before taking any step in court, consult a qualified lawyer in England and Wales.