Partnership hemant 2


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Partnership hemant 2

  1. 1. PRESENTED BY: - HEMANT BATHAMIndian institute of tourism and travelmanagementServices 2010-12
  2. 2. PARTENERSHIP• Section 4 of the Indian Partnership Act define partnership as “ Partnership is the relation between two or more persons who have agreed to share the profits of a business carried on by all or any of them acting for all.”• The person who enter into such relationship are called individually „partner‟
  3. 3. Partnership deedPrepared for resolving mutual differences.Usual content :- • Date of Agreement • Name and Address of the firm • Name and address of the partners • Nature of Business • Duration of Partnership • Capital invested by each partner • Ratio to divide Profit and Loss
  4. 4. Characteristics Features of Partnership• Two or more persons:-• Agreement :-• Business:-• Sharing of profit:-• Business carried on by all or any of them acting for all.
  5. 5. Essential Elements of partnership• Association of two or more person  Max limit 10 for banking;20 for other business• Results of an agreement  Partnership relation based on contract.  Implied or express(oral or written)• Must carry on sum business  Trade, occupation, profession• Share profits or loss the business.• Business is carried on by all or any one of them acting for all
  6. 6. TYPES OF PARTNER ACTIVE OR OSTENSIBLE PARTNER Engaged in actual conduct of the business His acts binds the firm and other partner Notice to be given in the case of retirement SLEEPING OR DORMANT PARTNER . Does not take part in the conduct of business Contribute his share of capital and enjoys profit and losses Not required to give notice in the case of retirement .
  7. 7. No real interest in business, does not contribute any capital, lends his name only No share in profit but liable in third parties for all acts of the firm Share the profit but not losses No interest in the management of the firm Liability for the act of the firm is unlimited A sub partner comes into existence when one of the partners agrees to share the profits derived by him from the firm with a stranger . That stranger is called sub partner
  8. 8.  PARTNER BY ESTOPPEL OR HOLDING OUT(section 28) Representing him self as a partner by word spoken or written or by conduct Liable as a partner if credit is given to the firm based on his representation . He can not deny. If a partner does not give a public notice and his name still used in the business . He is also liable to third parties OUTGOING PARTNER OR RETIRING PARTNER  A partner who leaves a firm in which the rest of the partners continue to carry on business INCOMING PARTNER1. A person who is admitted as a partner into an already existing firm with the consent of all the existing partners
  9. 9. RIGHT OF PARTNER• Right to take part in conduct of business{sec.12(a)}• Right to be consulted.{sec.12(c)}• Right to have access to book{sec.12(d)}• Right to share profit equally {sec.13(b)}• Right to use partnership property{sec.15}• Right to stop admission new partner{sec.31(1)}• Right in emergency• Right to retire{sec.32(1)}• Right to share profit after retirement{Sec.37}• Right not to be expelled{Sec 33}
  10. 10. Types of partnershipPartnership at Will ▫ No provision in contract between the partner for 1. Duration of partnership. 2. Determination of partnership. ▫ If any partner give notice of dissolution in writing, the partnership is dissolved.
  11. 11. Particular partnership •A person may become a partner with another person in particular adventure or undertaking . •On completion of such a venture ,a partnership come to an end .
  12. 12. Illegal partnership• By using a firm to carry `on an illegal business.• Where the number of partner exceeds the maximum limit. This has reference to Section 11 of the Companies act, 1956 Max limit for banking :- 10 Max limit for other business :- 20
  13. 13. Registration the firm• Registration the firm means getting the partnership firm registered with the registrar of firms .• Under the partnership act 1932, it is not compulsory for a partnership firm to get itself registered .• However , by certain disabilities from which an unregistered firm suffer , the law effectively ensured registration of firms.
  14. 14. Effect of Non-Registration• Suit between partner and firm : - A partner of an unregister firm can not sue the firm or any other partner of the firm to enforce a right (a)Arising from a contract (b) Conferred by partnership act• Suits between firm and third parties :- A Unregistered firm can not file to suit against a third party to enforce any right arising from contract.Ex. Such firm can not go to court for the recovery of the price of goods supplied .• Set-offAn Unregistered firm or any partner there of can not claim a set-off in a proceeding institute against the firm by a third party to enforce a right arising from a contract, until the registration of the firm effected
  15. 15. Dissolution of a firm Model Without the By order of the court order of the courtBy mutual Compulsory By Noticeagreement On happening of dissolution (sec. 43)Sec.40 certain contingencies Sec.41 Sec.42Insolvency all about one partner Business of the firm becoming unlawfulInsanity Permanent Misconduct Persistent Transfer of Perpetual Any other just incapacity Breach of interest loses and equitable Agreement ground
  16. 16. Deference between Partnership and Co-ownership Partnership Co-ownership 1. It arise from contract. It may , besides contract arise by status. 2.It always implies a business It may exist without any business. 3.It involve sharing of profit and loss It does not always involve the sharing of profit and losses because it may exist without any business. Each partner is the agent of every A Co-owner not the agent of the other other partner co-owners. A partner can not transfer his interest A co-owner may transfer his interest without the consent of all other to third party without the consent of partner. other co-owners.