Importqnt sections of Indian Contact Act

1. 1
The Indian Partnership
Act 1932
• Important points
Partnership
Partner
Registration of a Firm
Implied Authority of a Partner
Registration of a Firm
Partnership Deed
Legal Entity?
Admission of a Partner
Retirement of a Partner
Death of a Partner
Dissolution of a partnership firm.
Mutual Agency
Rights and duties of a partner
Leading cases
Sample Questions
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2. 2
Important section Numbers
Definitions: 2
Partnership, partner, Firm: 4
Rights of partner 11, 12
Property of the firm: 14
Partner is agent: 18
Implied authority of partner 19
Joint & Several Liability 25
Minor admitted as partner 30
Dissolution of a firm 40
Effect of Non registration; 69
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3. 3
Partnership
S-4 “Partnership” is the relation
between persons who have agreed
to share the profits of business
carried on by all or any of them
acting for all.
Persons who have entered into
partnership with one another are
called individually “partners” and
collectively “a firm”,
The name under which their
business is carried on is called the
“firm name”.
No. of partners:
Minimum 2 Maximum 20
Section 11 of Companies Act
prohibits partnership consisting of
more than 20 members
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4. 4
Mutual Agency
The real test of ‘partnership firm’ is
‘mutual agency’, i.e. whether a
partner can bind the firm by his act,
i.e. whether he can act as agent of
all other partners.
A partner is the agent of the firm for
the purposes of the business of the
firm. [section 18].
S-11 The mutual rights and duties
of the partners of a firm may be
determined by contract between
the partners,
Every partner has right to take part
in the conduct of the business.
[section 12(a)].
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5. 5
Rights & Liabilities
S-14 Property and rights and
interests in property acquired with
money belonging to the firm are
deemed to have been acquired for
the firm.
S-19 (1) The act of a partner to
carry on business of the firm, binds
the firm. The authority of a partner
to bind the firm conferred by this
section is called his “implied
authority”.
S-25 Every partner is liable, jointly
with all the other partners and also
severally, for all acts of the firm
done while he is a partner. Liability
of the firm is Unlimited.
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6. 6
Minor Partner
S-30(1) A minor may not be a
partner in a firm, but, with the
consent of all the partners he may
be admitted to the benefits of
partnership.
S- 30 (2) Minor has a right to share
of the property and of the profits of
the firm & he may have access to
and inspect and copy any of the
accounts of the firm.
S-30(3) Minor’s share is liable for
the acts of the firm, but the minor
is not personally liable for any such
act.
.
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7. 7
Reconstitution of firm
Death or insolvency of a partner
means dissolution of the firm.
Partnership can provide that the
firm will not dissolve in such case.
Dissolution of a firm
(a) By agreement (section 40)
(b) By insolvency (section 41)
(c)On happening of certain
contingency (section 42)
(d) By notice if partnership is at will
(section 43).
(e) by Court u/s 44.
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8. 8
Registration of a Firm
Registration is not compulsory,
Registration brings advantages
S-69(1) No suit to enforce a right
shall be instituted in any court by or
on behalf of any person suing as a
partner in a firm against the firm or
any person alleged to be or to have
been a partner in the firm unless
the firm is registered
S-69 (2) No suit shall be instituted
in any Court by or on behalf of a
firm against any third party unless
the firm is registered .
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