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Alex J.
Alex J., Litigator
Category: UK Law
Satisfied Customers: 3653
Experience:  LLB, LPC, DELF
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Thanks, ***** ***** a really good article. I would like to

Customer Question

Hi, thanks, ***** ***** a really good article. I would like to know what this actually means: "However, the remaining partners have an obligation to indemnify the paying partner against bearing more than their share of any liability or expense connected with the business." Do we have to buy insurance? I can't get my head around this...thanks, Sue
Submitted: 2 years ago.
Category: UK Law
Expert:  Alex J. replied 2 years ago.
Hi,
Thank you for your question and welcome.
My name is ***** ***** I will assist you.
Is this an indemnity contained in a partnership deed? Is it a provision for the exiting/retiring partners?
Kind regards
AJ
Customer: replied 2 years ago.
Hi,Yes this is about an ordinary partnership document and refers to a clause in it which says: "Each Partner for the term of the agreement shall indemnify the other Partners against all claims, actions, costs, liabilities and expenses payable or paid by the Partnership for and on behalf of the indemnifying Partner." I'm trying to understand what it actually means?
Thanks, Sue
Expert:  Alex J. replied 2 years ago.
Hi,
Thank you.
The clause means that if the partnership (i.e partnership assets and money) is used to pay any liabilities of an individual partner - that partner must essentially repay the other partners for this liability or loss.
An example would be - say the partnership was fined by HMRC because one partner had negligently filled in their tax return - that partner would have to cover the cost of the fine levied against the partnership. Another example say a partner took out a lease on a car in the name of the partnership, and he missed a lease payment - he would have to indemnify the other partners if the partnership made the lease payment on his behalf.
What sort of business does the partnership operate?
Kind regards
AJ
Customer: replied 2 years ago.
Thanks AJ,That makes sense. It's for a digital marketing partnership.Kind regards, Sue
Expert:  Alex J. replied 2 years ago.
Hi,
Thank you.
Are there are any personal or non business expenses you could bind one another to?
Kind regards
AJ