Quasi partners are the shareholders in quasi-partnership companies. Their interest in companies lies in the following areas (D. Milman 1999, P.45):
- Employment and participation, given their direct involvement.
- Maintenance the ‘’status-quo’’ to protect the basis on which the company was set up.
- Proper conduction of the company’s affairs.
- Their financial position, taking in consideration their personal resources invested in the company.
Quasi-partnership company does not have a legally defined term. Main characteristics of those companies are the following (S. McLaughlin 2015, P.45):
- Establishment with partnership expectations, especially the ones allowing all the owners to participate in management.
- They are being run by the owners like it were a partnership, for example allowing all owners to take part in management.
In general a quasi-partnership means a company in which there is a relationship of mutual trust between the shareholders, similar to the one between the members of partnership (J. Birds 2010, P. 1161). The quasi-partnership businesses are partnerships in their very substance but they exist in the form of limited companies. They are typically small, private companies, formed on the personal relationship’s basis. Members have mutual confidence and understanding in others shareholders (S. Sime 2016, P.168). There may be an agreement that some or all of the shareholders are to take part in the conduction of the business. They will be financially and personally committed to the company (D. Milman 1999, P.45).
In order for a company to be categorized as a quasi-partnership, following matters are relevant (S. Sime 2016, P.169):
- Restrictions in share transfers may result from expressing provision of shareholders’ agreement.
- The number of shareholders is important, but not determinant. In general, the smaller the number, the more likely the company is a quasi-partnership.
- Changes in the membership or company's ethos may change.
- A member who at first was not a quasi-partner may become one at later stage. One may be gifted shares in existing company.
- Equal shareholding is characteristic for quasi-partnership, yet it is not determinative.
- All the members playing role in the management points towards a quasi-partnership. It is possible for shareholders in form of limited companies to be quasi-partners.
- Birds J. (2010)., Annotated Companies Legislation, Oxford
- Collyer J. (1878)., The Law of Partnership
- Hannigan B. (2018)., Company Law 5th Edition, Oxford
- McLaughlin S. (2015)., Unlocking Company Law 3rd Edition, Routledge
- Milman D. (1999)., Regulating Enetrpirse LAw and Business Organisations in the UK, Hart Publishing
- Sealy L., Worthington S. (2008) Cases and Materials in Company Law 8th Edition, Oxford
- Sime S. (2016)., Company Law in Practice 11th Edition, Oxford
Author: Karolina Liskiewicz