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Contents of agreement

Amount of capital contributed by partners

Profit or loss sharing ratio

Duration of business

Duties and rights of partners

Nature and terms of business

©
 
 


-nlimited liability

No separate legal entity

Restriction on transfer of interest

-nanimity of consent
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Active partners are those partners, who
actively participate in the business of the
firm.

è

© 


Dormant, also known as sleeping, or
nominal partners, are those, who join the
firm by agreement but do not actively
participate in the business of the firm.

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Rhen a partner transfers a share of his
interest in a firm, the transferee is called a
sub-partner.
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, under which

 of
the firm is carried on, is called the ³ 


.´
  

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©hould not be a name already adopted by
a reputed firm, to mislead public
  
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©houldnot contain words : Crown,
Emperor, King, Queen, Royal, Empire,
Imperial or words expressing or implying
the sanction, approval or patronage of
Government
Œypes of Partnership

Partnership for a Fixed Œerm

 Duration is fixed

 Partnership comes to an end when the term

expires.

 If Partners continue the business after the

fixed period, it becomes partnership at will.
 
 


 

 No provision in contract between the partners
for

Duration of Partnership

Determination of Partnership

 If any partner gives notice of dissolution in

writing, the partnership is dissolved.
 
 


 
 
 A person may become a partner with another
person in particular adventures or
undertakings.

 On completion of such a venture, the

partnership comes to an end.
D

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©ection 58 lays down that the registration of a

firm may be effected 


 by sending 
 
  

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  a




 the prescribed form and
accompanied by the     stating the
following particulars:
 
 of the firm
 Œhe place or    of
the firm
 
 
  where the
firm carries on business
 
 when each partner joined the firm
 
 


  of the partners
  
  of the firm
è 
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©ection 39 lays down : ³ 

 

  between 

 
 
is called
 
  


´

Rhen a firm is put to an end, it is called

the  
   

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A firm may be dissolved by any of the

following
  ways:
 £y voluntary acts of the partners
themselves

 £y operation of law

 £y intervention of Court
D
è
 
 

©ection 11 lays down : ³©ubject to the

provisions of this Act, the mutual rights
and duties of the partners of a firm may be
determined by contract between the
partners, and such contract may be
expressed or may be implied by a course
of dealing.
è
 
 
Œhe Indian Partnership Act, 1932,
prescribes the following duties and
liabilities of partners of a firm:

Rhat are the General Duties of Partners?

 Œo carry on the business of the firm to the
greatest common benfit
 Œo be just and faithful to each other in their
mutual dealings
 Œo render true accounts and full information of
all things, affecting the firm, to any partner or
to his legal representative
è
 
 

A Duty to indemnify the Firm for Any Loss,

Caused by Fraud.

A Duty of a Partner to attend Diligently to His

Duties.

A Duty of a Partner to indemnify the Firm for Any

Loss, Caused by His Rillful Neglect.

A Duty of a Partner to account for Private Profits

A Duty of a Partner to account for Profit in

Competing £usiness

No Remuneration to Partners
D
 
 

Right to take Part in the business of the firm

Right to share Equally in the Profit, Earned by

the Firm

Right to claim interest on the Capital, ©ubscribed

by Partners

Right to be consulted in All Matters of the Firm

Right to Access to the £ooks of the Firm

Right to claim Interest on Advances Made by

Partners

Right of a Partner to be Indemnified

D
 
 

Right of a Partner to act in an Emergency

Right of a Partner to prevent Introduction of a

New Partner

Right of a Partner to Retire

Right of a Partner not to be Expelled

Right of an Outgoing Partner to carry on

Competing £usiness

Right of an Outgoing Partner to ©hare in the

Profit
 
 
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—oint property of all the partners as

opposed to their personal property

Property includes
 Originally brought into firm by partners
 Acquired by the firm
 Acquired by one or more partners for the
purpose of business
 Goodwill of the firm

Œo be held and used by all partners for the

purpose of business (not for private use)
 
  º

©ec 30(1), A person who is a minor

according to law to which he is subject
may not be a partner in a firm, but with the
consent of all the partners for the time
being, he may be admitted to the benefits
of partnership.

A minor can only be admitted to the

benefits of an already existing partnership
 
  º

During his Minority

Rights
 Right to receive agreed share of profits and
property
 Have access to and inspect and copy the
accounts of the firm
 If share in profits is not given, can sue (can do
if he wants to sever his connection)

Liabilities
 Only to the extent of share in profits and
properties (not personally liable)
 
  º

On Attaining Majority
 Rithin six months should give notice whether
he is joining the partnership or not.
 If notice not given he shall become a partner
D

  
 
 



-nder the Partnership Act in the absence of any

usage of trade to the contrary, the implied
authority of a partner does not empower him to
do the following acts:
 ©ubmit a dispute relating to the business of a firm to
arbitration.
 Open a bank account in his own name.
 Compromise or relinquish any claim of the firm.
 Rithdraw a suit or proceeding on behalf of the firm.
 Admit any liability in a suit or proceeding against the
firm.
 Acquire immovable property on behalf of the firm.
 Œransfer immovable property belonging to the firm.
 Enter into partnership on behalf of the firm.