Vol. 524 No. 1
8 Mr. Shatter asked the Tánaiste and Minister for Enterprise, Trade and Employment the plans she has to reform partnership law in view of the dramatic increase in the number of partnerships and their importance in business and the fact that the law is based on 19th century legislation; and if she will make a statement on the matter. [21633/00]
This is an area that may warrant review in terms of possible inadequacies in the Partnership Act, 1890, the Limited Partnerships Act, 1907 or the Investment Limited Partnerships Act, 1994 and I will consider whether it is appropriate for referral to the Company Law Review Group.
I urge the Minister to ensure this matter is referred to the Company Law Review Group. Under the current legislation, if a partner dies, his or her estate can force the sale of the practice regardless of the profitability or damage that might effect on the firm's goodwill. Where a partner is found to be negligent, no proper procedures are in place to expel that partner and the partnership must be dissolved. This is 19th century legislation and the Minister must ensure that major changes are made to it. Partnerships comprise a huge part of the service industry which has been criticised in the past in regard to inflation and which requires a radical overhaul.
In the event of a partner dying, the situation to which the Deputy referred would only apply if no other arrangements had been put in place. However, I share some of the Deputy's concerns which are outlined in a recently published book written by solicitor, Michael Twomey, and launched by the Attorney General.
The UK has introduced legislation in this area but I must admit that until this question was tabled and I read the background notes on the existing inadequacies, this matter was not on the legislative priority list. I will consider the matter and ask the Company Law Review Group for its opinion. Mr. Twomey suggests that the number of partners should be limited to 20 and that mechanisms should be put in place to resolve disputes between partners and to deal with difficulties which might arise on the death of a partner if prior arrangements have not been made. I thank the Deputy for tabling this question and I will examine the matter.
Will the Minister confirm that she will refer this matter to the Company Law Review Group and that it will be given priority treatment there? There are situations in which the 20 partner limit is being circumvented through the establishment of two partnerships of perhaps 20 partners each. These situations have not been tested under the law and serious questions could arise. Will the Minister review this matter urgently and ensure that legislation is introduced?
I cannot say the matter is as urgent as some others. Prioritising involves rating var ious matters in order of urgency. My Department's first priority is the completion of the company law enforcement legislation and the insurance legislation. The proposals in the report of the audit review group will also require legislation and existing company law must be consolidated in regard to co-operatives, etc. Some of the matters raised by the Deputy merit consideration. Mr. Twomey's study deserves serious consideration by the Department and the Company Law Review Group which advises the Minister on legislative changes in this area on a biannual basis.
