Contracts of Partnership
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Specific Contracts - Contracts of Partnership

Specific Contracts - Contracts of Partnership

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Contracts of Partnership Contracts of Partnership Presentation Transcript

  • CONTRACTS OFPARTNERSHIP(The Indian Partnership Act, 1932)By Kapil Chawla
  • Contents1. Overview of The Indian Partnership Act,19322. Partnership : Meaning & Definition3. Features of Partnership4. Partnership & Joint Hindu Family5. Kinds of Partners6. Partnership and Agency( Rule in Cox vs.Hickman)7. Registration of Firm8. Effects of Non-Registration9. Rights Duties of Partners10.Dissolution of Firms
  • Partnership : Meaning & Definition Partnership Meaning Definition (Section 4)◦Partnership◦Partner◦Firm◦Firm Name
  • Features of Partnership1.Association of two or morepersons2.Agreement3.To carry on Business4.Sharing of profits5.Mutual agency
  • Features of Partnership1.Association of two or morepersons
  • Features of Partnership2. Agreement(Partnership Deed)
  • Features of Partnership3. To carry on Business
  • Features of Partnership4. Sharing of profits(equally or in proportionof capital)
  • Features of Partnership5. Mutual Agency (Oneacting for all and all actingfor one)
  • Partnership & Joint Hindu FamilyPartnership Firm Joint Hindu Family Firm1.The relation ofpartnership arisesfrom contract, and notfrom status.1.The relation of JointHindu Family firmarises from status, andnot from contract. Itarises by operation oflaw.2.Every partnership firmis governed byprovisions of IndianPartnership Act, 1932,Indian Contract Act,1872 etc.2. Every Joint HinduFamily firm isgoverned by thecodified anduncodified HinduLaws.
  • Partnership & Joint Hindu FamilyPartnership Firm Joint Hindu Family Firm3. The interest of thepartners in a of apartnership firm isdetermined bycontract.3. The interest of themembers of HinduJoint Family firm inancestral business isacquired by status,i.e. by birth.4. A Partnership firmmay be constitutedirrespective of themembers’ caste andreligion.4. A Joint Hindu Familyfirm is limited toHindu religion, thattoo the caste to whichthe members belong.
  • Partnership & Joint Hindu FamilyPartnership Firm Joint Hindu Family Firm5. A Partnership firm is bydeath, insanity of apartner.5. A Joint Hindu Familyfirm is not dissolved bydeath or insanity offamily member.6. No person can beintroduced as a partnerwithout the consent ofall the partners (Sec.31).6. A member of a JointHindu acquires aninterest in the firm’sbusiness by birth,marriage, adoption etc.No consent of the othermembers is necessary.Other members cannotdeprive his right.
  • Partnership & Joint Hindu FamilyPartnership Firm Joint Hindu Family Firm7. Partnership is a specificapplication of theprinciples of agency. It isoften said “The law ofpartnership isundoubtedly, a branch ofthe law of Principal andAgent”.7. The principles of agencydoes not apply in case ofJoint Hindu Family firm.8. There is restriction on themaximum number ofmembers in the case of apartnership firm. Minimumtwo and maximum twentypartners are allowed.8. There is no suchrestriction.
  • Partnership & Joint Hindu FamilyPartnership Firm Joint Hindu Family Firm9. The liability of themembers is not limitedto the extent of hisinterest in the assets ofthe partnership firm.9. The liability of themembers is limited tothe extent of hisinterest in the assets ofJoint Hindu Family.10.Doctrines of HoldingOut and Estoppel areapplicable.10.Doctrines of HoldingOut and Estoppel arenot applicable.11.A person can beadmitted as a partner inthe firm due to hismoney, reputation,skills, ability etc.11.A person can beadmitted as a membersin a Joint Hindu Familyby the fact of marriage,birth, adoption.
  • Kinds of Partners1.Active Partner2.Sleeping Partner3.Nominal Partner4.Partner by Estoppel orHolding out5.Minor Partner
  • Kinds of Partners1.Active Partner2.Sleeping Partner3.Nominal Partner4.Partner by Estoppel orHolding out5.Minor Partner
  • Kinds of Partners1.Active Partner (works activelyin firm)
  • Kinds of Partners2. Sleeping Partner (does notwork, but invests capital)
  • Kinds of Partners3. Nominal Partner (firm useshis name for reputation)
  • Kinds of Partners4. Partner by Estoppel orHolding out (keeps silencewhen announced as partnerbefore others)
  • Kinds of Partners5. Minor Partner (Minor asPartner)
  • Partnership and AgencyThe Law of Partnership is an Extension of theLaw of Agency or Law as to Partnership isundoubtedly a Branch of the Law of Principaland Agent or the Rule in Cox vs. Hickman
  • Partnership and Agency◦ Cox vs. Hickman (1860) 11 ER 431◦ Facts of the case
  • Registration of Firm Procedure for Registration◦ Application contains the followingparticulars (Sec 58) Firm name Place or principal place of business Names of any other places, wherefirm carries on business Date when each partner joined thefirm Full names & permanent addressesof the partners Duration of the firm
  • Effects of Non-Registration (Sec. 69)1. Partner cannot sue2. Firm cannot sue3. Claim of set-off
  • Effects of Non-Registration (Sec. 69)Exceptions (Sec. 69(3))1. Suit for accounts of a dissolved firm2. Suit for dissolution of the firm Claim of set-off3. Suit for realising the property of a dissolvedfirm4. Proceeding by Official Assignee or Receiver torealise the property of an insolvent partner5. Claim of set off not exceeding Rs.100provided it is not of a small cause nature
  • Rights & Duties of Partners
  • Rights of Partners1.Rights to take part in thebusiness(S.12(a)2.Right to be consulted (S.12(c))3.Right to access to books (S.12(d))4.Right to Indemnity (S.13(e))5.Right to claim remuneration,profits and interest on Capital(S.13(a), S.13(b) and S.13(c &d))
  • Duties of a Partner1. Duty to carry on business for commonadvantage (S.9)2. Duty to render true accounts (S.9)3. Duty to indemnify loss (S.10)4. Duty to attend diligently (S.12(b))5. Proper use of firm’s property
  • Dissolution of Partnership Firm◦ Dissolution of Firm Meaning & Definition◦ Dissolution of Partnership
  • Modes of Dissolution ofPartnership Firm1. Without the Order/ Intervention of theCourti. By agreement (S. 40)ii. Compulsory dissolution (S.41)iii. Dissolution on the happening of certaincontingencies (S.42)iv. Dissolution by notice of partners at will (S.43)
  • Modes of Dissolution of PartnershipFirm2. Dissolution by the Court (S.44)i. Insanity of partnerii. Permanent incapacityiii. Misconductiv. Breach of agreementv. Business working of lossesvi. Any other ground
  • Conclusion1. Overview of The Indian Partnership Act,19322. Partnership : Meaning & Definition3. Features of Partnership4. Partnership & Joint Hindu Family5. Kinds of Partners6. Partnership and Agency( Rule in Cox vs.Hickman)7. Registration of Firm8. Effects of Non-Registration9. Rights Duties of Partners10.Dissolution of Firms
  • ThanksKapil Chawla