Partnership Law Act 2019

Relationship of partners to third persons and to each other - Relationship of partners to one another

46: Firm must indemnify partner for payments made, and personal liabilities incurred, for firm

You could also call this:

"Partnership must pay partners back for money spent or debts taken on for the business"

If you're in a partnership, you should know that the partnership must pay you back for any money you spend or any personal debts you take on for the partnership. This applies in two situations. First, when you spend money or take on debt as part of the normal, proper way of running the partnership's business. Second, when you spend money or take on debt to do something that's needed to protect the partnership's business or property. This rule helps make sure that you're not left out of pocket when you act for the good of the partnership.

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This page was last updated on 13 May 2025

View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=LMS206046.

Topics:

Business > Industry rules

45: Partners share equally in capital and profits and contribute equally to losses, or

"Partners in a business share the money they make and the money they lose equally"

47: Entitlement to interest, or

"Partners can earn interest on extra money they put into the business"

Part 3Relationship of partners to third persons and to each other
Relationship of partners to one another

46Firm must indemnify partner for payments made, and personal liabilities incurred, for firm

The firm must indemnify a partner for payments made, and personal liabilities incurred, by the partner—
in the ordinary and proper conduct of the partnership business; or
in or relating to doing any thing that is necessary to preserve the business or property of the firm.

Compare

1908 No 139 s 27(b)