Here you will find comprehensive and easy-to-understand notes about Partnership law in Tanzania.

Throughout these partnership law notes, I will explore

Law govern Partnership in Tanzania
Meaning of Partnership
Formation of Partnership in Tanzania
Advantages and Disadvantages of Partnership
Types of Partners
Duties and Rights of Partners
Partnership Property
Expulsion of Partners
Dissolution of Partnership
Effects of the Dissolution of Partnership
etc.

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Law Governing Partnership in Tanzania

The primary law that governs partnership in Tanzania is Part X of the Law of Contract Act (LCA), Cap 345.

Among other things, this law provides for the meaning of partnership, the formation of partnership, duties, and rights of partners, partnership property, dissolution of the partnership, etc.

Meaning of Partnership

A partnership is defined under section 190 (1) of LCA to mean “the relation which subsists between persons carrying on business in common with a view of profit”.

In the case of FRANSISCA N. MUKAJUNA vs FRANCIS M. MAKASSY CIVIL CASE NO 15 OF 2017, HC DSM, Judge MRUMA, J defines Partnership as an agreement between two or more persons who combine their resources to form a business and agree to share risks, profits, and losses.

Imagine two friends, Alex and Taylor, who share a passion for creating handcrafted furniture. Instead of pursuing individual ventures, they decided to form a partnership named “Artisan Creations.” In this partnership, both Alex and Taylor contribute their skills, expertise, and resources to create and sell unique, handcrafted furniture pieces.

Persons who have entered into a partnership with one another are called collectively as “firm” and the name under which their business is carried on is called the ‘firm’ name. [S 190 (2)].

When it comes to partnerships, the law acknowledges the connection between the people involved (the partners) but doesn’t see the partnership itself as a separate entity.

In other words, the partnership is not treated like its own independent thing apart from the individual partners.

So, when the partnership does something, like making a decision or entering into a contract, the law considers it as if each partner is personally doing that action.

The partnership doesn’t have its own existence in the eyes of the law – it’s just a group of people working together, and whatever the partnership does is really just the individual partners doing things in their personal roles.

Formation of Partnership

The relationship of partnership arises from contract and not from status S 191.-(1).

That means when people decide to work together as partners in a business, it’s not because of their formal position or title (status), but because they have agreed to do so by making a specific agreement or contract.

Imagine you and a friend want to start a lemonade stand together. You don’t become partners just because you’re friends; instead, you become partners by talking about it and deciding to work together.

You might agree on things like how much money each of you will invest, how you’ll share the work, and how you’ll split the money you make.

This agreement is like a contract, and it’s what creates the partnership, not any official title or status.

So, the idea is that partnerships are formed by people willingly agreeing to work together, not because of any special status or role they have. It’s a result of a mutual understanding and agreement between individuals.

Therefore for a partnership to be formed the following elements must be present

Contract
Business
Partners
Intentio to make a profit

NB; The existence of a partnership like any other contract may be expressed or implied from the conduct of the parties, and not necessarily the existence of a partnership deed. See FRANSISCA N. MUKAJUNA vs FRANCIS M. MAKASSY CIVIL CASE NO 15 OF 2017, HC DSM

Partnership Agreement

A partnership Agreement also known as a Partnership Deed is a primary document in the formation of a partnership.

I have a full guide that teaches everything you need to know about Partnership Agreements. read it here

Once a partnership deed is ready, the following is what next;

Registration of partnership

The partners must register the firm with BRELA and obtain a registration certificate, which displays the partners’ names and their respective distribution ratios.

to successfully register a firm, you must do the following;

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