Can You Use The Partnership’s Name After Its Dissolution?

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Can the partners to a law firm continue using the firm’s name/ partnership’s name after the dissolution of the firm? This issue was discussed in the court of appeal case of Tai Foong Lam v Hamdi Abdullah & Ors¹.

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Brief facts of the case

5 lawyers (namely Tai Foong Lam, Hamdi Abdullah, Vincent Chan, Foo Joon Liang and Gan Khong Aik) were all partners in a legal firm known as ‘Abdullah & Chan’ (They, however, never entered a partnership agreement between them). They decided to call it quits when the relationship between them turned sour. Foong Lam issued a notice of dissolution, and (after bringing the matter to court) the court ordered the firm:

To be dissolved two months from the notice of dissolution;
That a dissolution committee to be formed to have the partnership assets listed and sold; and
Allow Hamdi Abdullah and Vincent Chan to practice under the name ‘Abdullah Chan’.

The parties’ contention

Foong Lam, Joon Liang and Khong Aik objected to the use of the name, citing that:

It is likely to cause confusion and mislead the public; and
The court’s failure to consider the legal principle that the goodwill in the name was previously owned jointly by all the partners of the dissolved firm and cannot be sold or utilised by any of the partners without the consent of all of the partners.

Hamdi Abdullah and Vincent Chan contended otherwise, namely:

They have the right to use the name to practice since their briefs were mainly corporate and non-contentious matters and there was a need for some continuity in respect of their clients’ matters;
Since they never entered a partnership agreement, each partner is entitled to use the firm’s name and to carry on business under the style of the partnership as long as it does not expose the rest of the partners to any liabilities;
After dissolution, a partner still has continuing authority to bind the firm for purposes of winding up the affairs of the partnership and an obligation to complete all unfinished transactions under the name of the partnership.

The court’s decision

The high court agreed with Hamdi Abdullah and Vincent Chan, citing (amongst others) that:

The name is not likely to be confused/ misled the public with an existing registered firm;
Since another firm had already been set up by Khong Aik and Joon Liang (‘Gan Associates’), no confusion will arise with Abdullah Chan; and
The court has already placed several safeguards to ensure that the public will not be misled/ confused by the name.

On appeal, the court of appeal disagreed with the high court and sided with Foong Lam, Joon Liang and Khong Aik.

The court’s rationale/ What did the court say?

On appeal, the court of appeal first tackled the definition of ‘goodwill’, as (depending on the nature of the goodwill) the use of the name might have various consequences in the future.

Therefore, and first things’ first: how do you define goodwill?

In this case, the court noted that the word ‘goodwill’ includes the name of the firm as it²:

“…relates to the implicit and intangible element of reputability, character, even respectability of a company or an establishment or a partnership…In this case, goodwill includes the name of the partnership which normally forms part of its asset.”

Once that was out of the way, the court now could determine whether Hamdi Abdullah and Vincent Chan can use the name ‘Abdullah Chan’. In this regard, the court noted that³:

Whether a partner can use the name of the partnership after the dissolution depends on whether the goodwill of the partnership has been assigned and not whether the name of the dissolved firm carries the name of the partner who is objecting to the use of the name; and
In the event of a dissolution, in the absence of an express assignment or sale of the goodwill (since it is considered an asset) in any of the partner’s favour, none of them has the right to use the partnership name.

On the point above, the court noted that where goodwill is not sold/ where it is merely divided up between the partners to be common shared between the partners, each partner may use the name of the firm provided that the partners do not hold out on the other partners as still being partners with him/ her⁴.

Therefore, the answer to our first question at the start of this article is this: it all depends on the facts and circumstances of the case, namely whether the goodwill of the name is being sold as an asset upon the dissolution of the firm. If the answer is positive, all the partners cannot use the firm’s name upon dissolution. If the answer is negative, or as mentioned earlier, then yes, the partners can still continue using the firm’s name even after the firm is dissolved.

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