Partnership is like marriage, they say. Like a marriage, a partnership can be a sham, without outsiders being any the wiser. Does it matter if appearance is at odds with reality? True partner-ship is hard enough to define. And in solicitors’ partnerships it has long been accepted that non-partners may be held out as partners. This raises the question of how much involvement in the firm a non-partner who is held out as a partner must share, to avoid the partnership being labelled a sham?
First, when is a partnership a true one? In most marriages, the profits earned by one are shared by the other. Many would assume that participation in the profits of the common endeavour lies at the very heart of partnership. Not necessarily, as the Court of Appeal ruled in M Young Legal Associates v Lees and others [2006]. You can be a true partner without sharing in the profits at all.
