Partnerships and Criminal Law Review

A set of vocabulary flashcards covering the definitions and key concepts of UK partnership law, limited liability entities, and economic crimes including fraud, insider dealing, and money laundering.

Ordinary Partnership

Defined by s1 PA 1890 as 'the relation which subsists between persons carrying on a business in common with a view of profit.'

Firm

The word correctly used to denote a partnership rather than a registered company.

Personal Liability in Ordinary Partnerships

Because the standard partnership is not a separate legal entity, partners have full personal liability for the debts of the partnership.

Interest on Advances

Under the Partnership Act 1890, a partner is entitled to $5\%$ interest on advances made beyond their original capital.

Actual Express Authority

Authority specifically given to a partner, often via an express statement or as discussed between all partners in a meeting.

Actual Implied Authority

The authority a partner has as a result of the role they fulfil, usually including the power to bind the firm into contracts relating to the partnership business.

Apparent (or Ostensible) Authority

Where a partner acts outside their actual authority but still binds the partnership because a third party is unaware of the limitation on their powers.

Sole Trader

An individual carrying on a business where legally there is no distinction between the individual and the business entity.

Limited Liability Partnership (LLP)

A legal entity separate from its partners, formed under the LLPA 2000, where partners' liability is limited to the amount of capital they have contributed.

Whistleblowing

Workers making a disclosure of wrongdoing, usually by their employer, protected under the Public Interest Disclosure Act 1998 (PIDA 1998).

Qualifying Disclosure

A disclosure made in the reasonable belief that it shows a criminal offence, failure to meet legal obligations, miscarriage of justice, health and safety danger, environmental damage, or a deliberate cover-up.

Fraud by False Representation

Dishonestly making a false representation with the intent to make a gain for oneself or cause loss (or risk of loss) to another.

Fraud by Abuse of Position

Dishonestly abusing a position of trust for personal gain or to cause loss to another.

Phishing

A cyber threat involving bogus emails designed to elicit personal information from recipients.

Computer Misuse Act 1990

Legislation intended to secure computer material against unauthorised access (hacking) or modification.

Fraudulent Trading

The criminal and civil offence of carrying on a business with the intent to defraud creditors or for any fraudulent purpose, punishable by up to $10\,\text{years}$ in prison.

Insider Dealing

A criminal offence under the CJA 1993 involving the use of unpublished, price-sensitive information to deal in securities to make a gain or avoid a loss.

Inside Information

Information that is price sensitive, specific or precise, has not been made public, and relates to specific securities.

Bribery

Offered, promised, or given financial or other advantage intending to induce improper performance of a relevant function or activity.

Placement

The first phase of money laundering, involving the disposal of criminal proceeds into an apparently legitimate business or activity.

Layering

The second phase of money laundering, involving the transfer of money between various places to conceal its criminal origins.

Integration

The final phase of money laundering, where processed funds are given the appearance of originating from a legitimate source.

Tipping Off

A money laundering offence involving making a disclosure likely to prejudice an investigation, punishable by a maximum $2\,\text{year}$ sentence.

Integrity

A fundamental principle of the ICAEW Code of Ethics requiring professional members to be straightforward and honest in all business and professional relationships.

Objectivity

The ethical principle of not allowing bias, conflict of interest, or undue influence of others to override professional judgement.

Familiarity Threat

An ethical threat where an accountant fails to hold friends or family to account for unethical actions or covers up frauds due to their relationship.