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Partnership Law Act 2019

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

56: Duty to account for profits of competing business

You could also call this:

"Partners must share money from similar businesses they start without permission"

If you are a partner in a business, you need to be careful about running other businesses. You must give all the money you make from another business to your main business if two things are true. First, you started the other business without your partners saying it was okay. Second, the other business is similar to and competes with your main business. This means you can't secretly run a business that might take customers away from the business you share with your partners.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=LMS206056.

Topics:
Business > Industry rulesBusiness > Starting a business
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55: Accountability of partners for private benefit, or

"Partners must share benefits from partnership deals with each other"

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57: Rights of assignee of share in partnership, or

"Understanding what happens when a partner gives their share to someone else"

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

56Duty to account for profits of competing business

  1. Every partner must account for and pay over to the firm all profits made by the partner in a business if—

  2. the partner carries on the business without the consent of the other partners; and
    1. the business is of the same nature as, and competes with, the business of the firm.

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