1. Indian Partnership Act 1932 Presenter Prateek Kumar Singh Section L Roll no 34 Batch: Jan 2010- Jan 2012
2. Contents Essentials of Partnership “PARTNERSHIP NOT CREATED BY STATUS.” Registered Partnership firms Types of Partners Mode of giving public notice Rights, Duties and Liabilities of Partner Liability of a Firm Modes of Dissolution of Partnership Firm Process of Dissolution of Partnership 2
3. Definition- Partnership Relation between persons Agreed to share the profits Business carried on by all or any of them acting for all. Persons who have come together are called individually, "partners" Collectively "a firm", Business is carried in the "firm-name". 3
4. Essentials of Partnership A partnership is an Association of two or more person A partnership must emerge out a agreement The business to carried out must be legal and acceptable by law. The agreement must give all the essential details of Partnership e.g. profit sharing percentage, business to be conducted etc. Minor cannot be a partner. 4
5. “PARTNERSHIP NOT CREATED BY STATUS.” The relation of partnership arises from contract and not from status E.g. the members of a Hindu undivided family carrying on a family business as such, or a Burmese Buddhist husband and wife carrying on business as such are not partners in such business. 5
6. Registered Partnership firms- Procedure of registration Registration with Registrar of Firms Detailed statement(informing name, address, partner details etc.) and applicable fee must be deposited with the Registrar Statement must be signed and verified by all the partners. 6
7. Unregistered Partnership firms- disadvantages Any of the partner cannot file suit against the firm or against other partner to enforce his rights. The firm cannot file suit against any third party to claim loss or enforce its rights. Even the ‘right of set off’ is not available to the firm (i.e. setting off dues between other firms) 7
8. Types of Partners Sleeping partner or dormant partner Nominal partner Sub Partner Working partner 8
9. Partner Holding out or by Estoppel E.g. Mr. Ramesh has retired from the firm named R.K Brothers. He has not given a public notice of his retirement Mr. Ramesh will still be deemed to be a ‘partner holding out’ or ‘partner by estoppel’ 9
10. Mode of giving public notice A copy of the notice is required to be sent to the Registrar of Firms(this is not required if the firm being unregistered) A copy must be published in the local Official gazette and in one local vernacular newspaper circulating in the district. 10
11. Rights of Partner Take part in the conduct of business To share equally in the profits of the business To access to and to inspect and copy from any books of the firm To be joint owner of the property of the firm In emergency, take all actions to safeguard firm To resist introduction or admission of new partner Right not to be expelled 11
12. Duties of Partner General Duties: To carry on the business of the firm, to be just and faithful, to give true accounts and complete information. To indemnify the firm for the loss caused by him during the conduct of the firm’s business To contribute to the losses of the firm in equal proportion. Not to assign his own share to some other party To attend to his duties diligently 12
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14. He fails to carry on the business of the firm in highest common interest,
15. He fails to give true accounts.To indemnify 13
16. Liability of a Firm for wrongful acts of a partner The firm is liable in the given below situations: If a loss or injury occurs to a third party due the act of the partner in course of business of the Firm If a partner acting within his apparent authority receives money or property and misappropriates it. If money received by the Firm in course of business and the partners misappropriate it. 14
17. Modes of Dissolution of Partnership Firm By mutual agreement: All partners agree to close business. By notice of dissolution: By one partner giving notice to other partners By operation of Law: If one of the partner is adjudicated insolvent By happening of certain contingencies: Expiry at the completion of period By a decree of the Court: If the suit is filed against the partnership and the court orders dissolution. 15
18. Process of Dissolution of Partnership Issuing a public notice Return of premium on premature dissolution Sale of Goodwill after dissolution if any Payment of Partnership Debt Settlement of Accounts 16
