Indian Partnership Act 1932
Presenter
Prateek Kumar Singh
Section L Roll no 34
Batch: Jan 2010- Jan 2012
Contents
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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
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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".
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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.
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“PARTNERSHIP NOT CREATED BY
STATUS.”
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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.
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Registered Partnership firmsProcedure 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.
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Unregistered Partnership firmsdisadvantages
• 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)
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Types of Partners
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Sleeping partner or dormant partner
Nominal partner
Sub Partner
Working partner
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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’
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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.
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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
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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
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Liabilities of the Partner
• General Liabilities arise when:
o He fails to be just and faithful to all other
partners,
o He fails to carry on the business of the firm in
highest common interest,
o He fails to give true accounts.
• To indemnify
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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.
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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.
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Process of Dissolution of Partnership
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Issuing a public notice
Return of premium on premature dissolution
Sale of Goodwill after dissolution if any
Payment of Partnership Debt
Settlement of Accounts
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Thank You
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