is a contract among two or more persons, to carry on a certain business, at their joint expense, and share the gain or loss which arises from it. Of this there are four kinds.

I. Occasional joint trade, where two or more merchants agree to employ a certain sum in trade, and divide the gain or loss so soon as the adventure is brought to an issue. This kind of contract being generally private, the parties concerned are not liable for each other. If one of them purchase goods on trust, the furnisher, who grants the credit through confidence in him alone, has no recourse, in case of his insolvency, against the other partners. They are only answerable for the share of the adventure that belongs to the insolvent partner.

If it be proposed to carry the adventure farther than originally agreed on, any partner may withdraw his interest; and if it cannot be separated from the others, may insist that the whole shall be brought to an issue.

II. Standing companies, which are generally established by written contract between the parties, where the stock, the firm, duration, the division of the gain or loss, and other circumstances, are inserted.

All the partners are generally authorized to sign by the firm of the company, though this privilege may be confined to some of them by particular agreement. The firm ought only to be subscribed at the place where the copartnery is established. If a partner has occasion, when absent, to write a letter relating to their affairs, he subscribes his own name on account of the company. When the same partners carry on business at different places, they generally choose different firms for each. The signature of each partner is generally sent to new correspondents; and when a partner is admitted, although there be no alteration in the firm, his signature is transmitted, with an intimation of the change in the copartnery to all their correspondents. Houses that have been long established, often retain the old firm, though all the original partners be dead or withdrawn.

The powers of each partner are, in general, discretionary; but they ought not to act, in matters of importance, without consulting together, when there is an opportunity. No partner is liable to make good the loss arising from his judging wrong in a case where he had authority to act. If he exceeds his power, and the event prove unsuccessful, he must bear the loss; but if it prove successful, the gain belongs to the company: yet if he acquaints the company immediately of what he has done, they must either acquiesce therein, or leave him the chance of gain, as well as the risk of loss.

All debts contracted under the firm of the company are binding on the whole partners, though the money was borrowed by one of them for his private use, without the consent of the rest. And if a partner exceeds his power, the others are nevertheless obliged to implement his engagements; though they may render him responsible for his misbehaviour.

Although the sums to be advanced by the partners be limited by the contract, if there be a necessity for raising more money to answer emergencies or pay the debts of the company, the partners must furnish what is necessary, in proportion to their shares.

A debt to a company is not cancelled by the private debts of the partner: and when a partner becomes insolvent, the company is not bound for his debts beyond the extent of his share.

The debts of the company are preferable, on the company's effects, to the private debts of the partners.

Partnership is generally dissolved by the death of a partner; partner; yet, when there are more partners than two, it may, by agreement, subsist among the survivors. Sometimes it is stipulated, that, in case of the death of a partner, his place shall be supplied by his son, or some other person consecrated on. The contract ought to specify the time and manner in which the surviving partners shall reckon with the executors of the deceased for his share of the stock, and a reasonable time allowed for that purpose.

When partnership is dissolved, there are often outstanding debts that cannot be recovered for a long time, and effects that cannot easily be disposed of. The partnership, though dissolved in other respects, still fulfils for the management of their outstanding affairs; and the money arising from them is divided among the partners, or their representatives, when it is recovered. But as this may protract the final settlement of the company's affairs to a very inconvenient length, other methods are sometimes used to bring them to a conclusion, either in consequence of the original contract, or by agreement at the time of dissolution. Sometimes the debts and effects are sold by auction; sometimes they are divided among the partners; and when there are two partners, one divides them into shares, as equal as possible, and the other chooses either share he thinks best.

If a partner withdraws, he continues responsible for his former partners till it be publicly known that he hath done so. A deed of separation, registered at a public office, is sufficient presumption of such notoriety.

III. Companies, where the business is conducted by officers. There are many companies of this kind in Britain, chiefly established for purposes which require a larger capital than private merchants can command. The laws with respect to these companies, when not confirmed by public authority, are the same as the former, but the articles of their agreement usually vary different. The capital is consecrated on; and divided into a certain number of shares, whereof each partner may hold one or more, but is generally restricted to a certain number. Any partner may transfer his share; and the company must admit his affiance as a partner. The death of the partners has no effect on the company. No partner can act personally in the affairs of the company; but the execution of their business is intrusted to officers, for whom they are responsible; and, when the partners are numerous, the superintendency of the officers is committed to directors chosen annually, or at other appointed times, by the partners.

IV. Companies incorporated by authority. A royal charter is necessary to enable a company to hold lands, to have a common seal, and enjoy the other privileges of a corporation. A charter is sometimes procured, in order to limit the risk of the partners: for, in every private company, the partners are liable for the debts, without limitation; in incorporated societies, they are only liable for their shares in the stock of the society. The incorporation of societies is sometimes authorized by act of parliament; but this high authority is not necessary, unless for conferring exclusive privileges.

Mr Paley says, "I know of nothing upon the subject of partnership that requires explanation, but how the profits are to be divided where one partner contributes money and the other labour, which is a common cause."

"Rule. From the stock of the partnership deduct the sum advanced, and divide the remainder between the moneyed partner and the labouring partner, in the proportion of the interest of the money to the wages of the labour, allowing such a rate of interest as money might be borrowed for upon the same security, and such wages as a journeyman would require for the same labour and trust."

"Example. A advances 100l. but knows nothing of the business; B produces no money, but has been brought up to the business, and undertakes to conduct it. At the end of the year the stock and effects of the partnership amount to 1200l. consequently there are 200l. to be divided. Now nobody would lend money upon the event of the business succeeding, which is A's security, under 6 per cent, therefore A must be allowed 60l. for the interest of his money, B, before he engaged in the partnership, earned 30l. a-year in the same employment: his labour, therefore, ought to be valued at 50l. and the 200l. must be divided between the partners in the proportion of 60 to 30; that is, A must receive 134l. 6s. 8d. and B 66l. 13s. 4d. If there be nothing gained, A loses his interest, and B his labour, which is right. If the original stock be diminished, by this rule B loses only his labour as before; whereas A loses his interest and part of the principal; for which eventual disadvantage A is compensated, by having the interest of his money computed at 6 per cent. in the division of the profits when there is any. It is true, that the division of the profit is seldom forgotten in the constitution of the partnership; and is therefore commonly settled by express agreement; but these agreements, to be equitable, should pursue the principle of the rule here laid down. All the partners are bound by what any one of them does in the course of the business; for, quod hoc, each partner is considered as an authorised agent for the rest."