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It’s important to place a notice in Gazette when partner leaves or retires. If this is not done third parties can assume they have apparent authority. This is linked to following topic thread-
https://opentuition.com/topic/implied-vs-apparent-authority/
Usually, I have seen this brought up with regard to protecting leaving partner from being exposed to liability for debts or claims against them penalty after retirement from firm. However, it would also protect the ongoing firm from exposure to third party claims that they believed former partner was acting on behalf of the partnership after they have left or retired. Is that correct?
Jon, I’ve never given any thought to the protection of the continuing firm after the retiring partner has gone.
But, of course, that must be correct – the Gazette notice serves to protect all concerned … that is, providing the innocent third party is in the habit of reading the Gazette!
I once (yes, just ONCE) saw a copy of the Gazette (in those days of long ago it still went under the title of ‘The London Gazette’) and I don’t believe that I have ever met anyone that has read the Gazette.
So the effect of ‘posting a notice in The Gazette’ seems to me to be a practical manoeuvre to forestall a multitude of potential cases that could arise where new third parties enter into contracts with ex-partners and then seek to hold the firm liable.
OK?
I would agree in practical terms most people would only see such a notice if they were actually looking for such a notice (in such a case they would likely know or suspect a partner has left/retired)and even then almost certainly on the online version. I have no idea what the circulation of physical copies of Gazette would be in present day, but I would guess extremely small. Legally it does have statutory impact-
I guess my point with the above would be that continuing partners would be well advised to check such a notice has been placed in Gazette with an online search as well as communicating to existing clients and customers and suppliers that partner has left. I would imagine the Gazette may have been much more read widely read in 1890. Then again it was maybe even then not that widely read amongst the general public but was amongst MPs and members of House of Lords and said parliamentarians have made assumptions when drafting above legislation.
Of equal relevance / importance would be for a retiring partner to ensure that notice had been properly given to local newspapers, existing customers and suppliers, taxman, firm’s solicitors and bankers as well as the Gazette. In addition, the retiring partner should ensure that all the firm’s notepaper that bears his name should be destroyed (or, at least, amended).
A lovely case to illustrate the issue is Tower Cabinet Co Ltd v Ingram
That’s an interesting case. Just looked it up. I would suggest making sure a retiring or leaving partner makes sure their name and photo is removed from the website and related social media might also come into play in today’s world. Also making sure emails no longer carry name. Firm business cards and merchandise and all other related items and signs would also have to be considered.
It’s certainly a BIG deal to remove all trace / connection that you may have had when a partner leaves the firm. Ingram did his best but was still in the line of fire from an old contract where his name appeared on the paperwork.
I can see that removing any and all connection from social media and from websites could be an horrendous exercise. I wonder whether a header or footer placed on the website would be the appropriate answer?
However, I can’t see that ACCA law question composers would incorporate such a scenario into a multi-choice question!
Yes, it’s a difficult situation. I imagine getting something written into a partnership exit agreement about some of steps that should be taken by remaining partners might help. Also correspondence after leaving asking for assurance that appropriate steps have been taken. I am not sure if insurance could be purchased to mitigate risk. Totally agree about near impossibility of question about this coming up in exam in its present format. Still a worthwhile topic to consider for potential real life consequences. Obviously social media and similar things would not be on the minds of drafters of the legislation in 1890.
From the very depths of my memory, I seem to recollect that from one exam paper to the next in the same topic (eg Financial Accounting / Advanced Financial Accounting) by the time I was starting to work on the Advanced, pretty much ALL my knowledge from the first paper had disappeared.
How much our Law students will remember post-qualification about the idiosyncrasies of partnership law is most questionable. My guess would be somewhere in the range of very little through not much down to zero.
My advice today for their futures would be that, should they find themselves in the position of being in a partnership / about to remove a partner / about to be removed as a partner they should take legal advice.
I believe that you and I have thrashed this out beyond where an OpenTuition law student would likely still to be interested!
OK?
I think that’s good advice. I think law isn’t that popular amongst many ACCA students.At least that has been my personal experience.As you have probably gathered, I am an exception to this rule. Even before I studied ACCA I enjoyed reading about certain law and law related subjects such as criminology for fun. Interestingly when looking into this topic I saw a post from a practicing lawyer wondering if it was necessary to put a notice into the Gazette on their retirement. I think changing technology could also make this problem easier or more difficult in the decades to come. For example, it might be easier by simply telling an AI agent to take appropriate action after a certain date and time. Anyway thanks for all your input on this topic and others.
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