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Content
Definition of Partnership
Essentials element of partnership.
Kinds of partners
Types of partnership
Rights of partner
Partnership Deed
Difference Between Partnership firm and Company
3.
Definition of partnership
( Acc. to Partnership Act 1932 )
“ Partnership is the relation between persons
who have agreed to share the profits
of a business
carried on by all or any one of them acting for all. ”
4.
“ A business organization in which two or more individuals
manage and operate the business.
Both owners are equally and personally liable for the debts from
the business. “
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Other Definition
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Essential elements of partnership:
Association of two or more persons
Partners must be competent
There must be existing business
Contract may be Expressed or implied
Sharing of profits
Prevalence of mutual agency.
6.
Kinds Of Partners
There may be different kinds of partners in a
partnership firm. The important classification of
partners is given below.
Actual or active partners,
Dormant or sleeping partner,
Nominal partner,
Partner in profits only .
7.
Types Of Partnership
Partnership at will-
Where time is not mentioned in agreement
Particular partnership –
Partner in a specific venture only
Partnership for fixed term
8.
Rights Of Partners
Rights to take part in management
Every partner has a right to take part in the conduct of the business.
Rights to inspect books
Every partner has a right to check the books of account of the firm and to get the
copies.
Rights to be consulted
Every partner has a right to be consulted and heard before any matter is decided.
Rights to share profit
Every partner has a right to share equally in the profits earned by the firm,
irrespective of his amount of capital contribution.
9.
Rights to interest on capital
A partner is not entitled to receive interest on capital contributed by him..
Right to use property
Every partner of the firm is co-owner in the property of firm and he has a right
to use it for the best benefit of the business of the allowed.
Rights to admit and expel partner
A new partner cannot be admitted in the firm and an old partner cannot be
expelled from the firm without the prior consent of all the partners.
Right to give opinion
Nature of the partnership business cannot be altered without the prior approval
of all the partners.
Rights Of Partners
10. Right to collect debts
A partner has an implied right to collect partnership debts and to give receipts for
payments.
Right to act as agent
Every partner can act as an agent on behalf of the remaining partners and bind the
other partners to his act.
Rights of retirement
Every partner has a right of retirement from the firm with the mutual consent of
all other partners. But when the partnership is at will, he can leave the firm at
any time while giving a due notice of his retirement from the firm.
Right of competing business
Any outgoing partner has a right to start a business competing with that of the
firm but he cannot use the name of the firm.
Rights Of Partners
11.
Right to Interest on Loan
Right not to expelled
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Rights Of Partners
12.
There are few cases where an individual has the right to get
profit of the business but he/she is not the partner in a firm
Property Owner
Money Lender
Employ
Widow
Sale of goodwill
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Exceptions
13.
Partnership Deed
Partnership Deed is the document that defines the
rights and obligations of partners.
Besides names, address and occupation of partners it
lays down the duration of partnership, nature of
business, profit sharing ratio, right to interest, salary,
commission etc.
14.
Partnership Deed
A partnership deed should contain the following clause
Name of the parties
Nature of business
Duration of partnership
Name of the firm
Capital
Share of partners in profits and losses
Banking, Account firm
Books of account
Powers of partners
Retirement and expulsion of partners
Death of partner
Dissolution of firm
Settlement of disputes
15.
Effects of non Registration
No suit in a civil court by a partner against the firm or co partner
No suit in civil court against third parties
Firm or partners cannot make claim to set off other proceeding based upon a contract
16.
Difference between partnership and Company
Regulating act
Number of members
Entity
Liability
Authority of members
Audit
Registration
Ownership of the property
