PA 1890 s. 9

Partners Are Jointly Liable for Firm Debts: PA 1890 s. 9

Every partner is jointly liable for all firm debts incurred while a partner. After death, their estate is severally liable for unsatisfied obligations.

Official text PA 1890 s. 9 — United Kingdom

Every partner in a firm is liable jointly with the other partners, and in Scotland severally also, for all debts and obligations of the firm incurred while he is a partner; and after his death his estate is also severally liable in a due course of administration for such debts and obligations, so far as they remain unsatisfied, but subject in England or Ireland to the prior payment of his separate debts.

Text in force at .

Source: legislation.gov.uk — The National Archives (legislation.gov.uk), reproduced under licence Open Government Licence v3.0.

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What it actually says

Section 9 is the sentence that makes an ordinary partnership a different proposition from a limited company. Every partner in a firm is liable jointly with the other partners for all debts and obligations of the firm incurred while he is a partner. There is no cap and there is no separation between business assets and personal assets: a partner's house and savings stand behind the firm's debts.

The words "while he is a partner" fix the period. Debts incurred before someone joined, and after they left, are not caught by this section - though the position of incoming and outgoing partners is qualified by section 17, and a retiring partner who does not give proper notice can remain liable to old customers under section 36. Liability is joint, which historically had procedural consequences, though modern civil procedure has largely removed the practical differences from several liability.

The second half deals with death: after a partner's death his estate is also severally liable in a due course of administration for the firm's debts and obligations so far as they remain unsatisfied, subject in England to the prior payment of his separate debts. So the estate does not escape, but the deceased partner's own personal creditors are paid first out of it. This is the background rule against which people decide whether to trade as a partnership at all, and it is the reason an unincorporated business between friends can turn one person's commercial misjudgment into another person's personal debt.

When it applies

  • A supplier pursuing one partner for the whole of a debt run up by the firm.
  • A partner who has left and is being chased for debts incurred while they were in.
  • The estate of a deceased partner facing claims from the firm's creditors.
  • Someone joining an existing partnership and asking what they are taking on.
  • A partnership with no written agreement where one partner has been the only one signing things.

What this section does not say

  • It does not limit liability to the capital contributed. Partners are personally liable without limit.
  • It does not apply to debts incurred before joining or after leaving - but see section 17 for incoming and outgoing partners and section 36 on notice of retirement.
  • It does not apply to limited liability partnerships, which are governed by the Limited Liability Partnerships Act 2000.
  • It does not decide how the loss is shared between the partners. That is section 24 and, on winding up, section 44.
  • It does not protect a deceased partner's estate. The estate is severally liable, subject only to prior payment of the partner's separate debts.

Worked examples

Invented situations, written to show how the wording bites. They are not real cases, not judgments and not precedent, and nothing here predicts what would happen in yours.

Illustrative example

An unincorporated business folds owing seventy thousand pounds. One partner ran up most of the debts; the creditors are pursuing the other, whose house is the only asset in sight.

How the wording applies

Every partner is liable jointly for all debts and obligations of the firm incurred while they are a partner, without any cap and without separation between business and personal assets. The fact that decides exposure is the timing of each debt against the period of partnership - 'while he is a partner' - not who signed for it. How the loss is then shared between the partners themselves is a different question, governed by sections 24 and 44.

How the parties settled it

The partners agree a written schedule apportioning the debts by reference to who benefited from each, with the partner who incurred the disputed items meeting them first and the balance shared equally.

Illustrative example

Someone leaves a partnership and hears nothing for a year, then receives a demand from a long-standing supplier for goods ordered after they left.

How the wording applies

Section 9 fixes liability to debts incurred while a person is a partner, so a debt arising after departure is outside it. The fact that can nonetheless keep the former partner on the hook is notice: section 36 leaves a retiring partner liable to old customers who were not told of the retirement, so what matters is whether this supplier was notified and how.

How the parties settled it

The continuing partners write to every supplier confirming the retirement date and indemnify the former partner against post-departure debts, and the former partner confirms the outstanding pre-departure balance.

Related sections

PA 1890 s. 1 Business in common with a view of profit: PA 1890 s. 1 PA 1890 s. 5 One partner's acts bind the firm: PA 1890 s. 5 PA 1890 s. 24 Equal profits split, no salary rules: PA 1890 s. 24 PA 1890 s. 44 Creditors, advances, capital: order under PA 1890 s. 44

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We copy this text from the official publisher and re-check it against that source on every page load, but we cannot guarantee it is complete, current or free of error, and we accept no liability for any reliance on it. An amendment can take effect before a consolidation catches up. The publisher's own copy is linked below; where the two differ, it is the official one that counts.

This page reproduces the text of PA 1890 s. 9 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.

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