The law relating to partnership is codified in the German laws. A partnership is there defined as the
relationship which subsists between persons carrying on a business in common with a view of profit. Thus,
a partnership is a 'relationship', and it may therefore come into existence without a
though, in practice, it will usually be constituted by the conclusion of formal 'articles of partnership'.
Such a relationship will not, however, exist unless partnership is the common intention; so that where two
people are working together with the aim of forming a company as yet not formed their relationship is not
one of partnership.
Although a partnership is not a legal 'person', because it is a
all partners are taken to be each others' agents in respect of all acts done in or about the partnership
business, and for convenience they may sue and
be sued in the
name of the German firm
Thus as a general rule, any act done in furtherance of the business by one partner binds the rest, even
though he has done it without their authority. This rule is in the nature of things subject to certain
exceptions: for example, where the partners have agreed that none of them shall alone have power to bind
the firm in relation to certain matters like
debt recovery and enforcement in Germany
if one of them purports to do so and the person with whom he deals knows of the agreement, the firm will
not be bound.
A further important rule of the law of partnership, which derives from a
general rule of German law
and of common sense, must also be noted. In order to protect strangers to the firm, wherever a man holds
himself out as a partner by acting as if he were a debtor, although he is not - for example by permitting
his name to appear upon the firm's note-paper - he may generally be held liable to anyone who gives the
firm credit in reliance upon this
in Germany, just as though he really were a client.
A partnership firm may be made liable for torts committed, as well as for debts incurred, by any partner
acting in actual or apparent furtherance of the business.