Business Law, Law of partnership


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Business Law, Law of partnership

  1. 3. Law of Partnership Rizwan Ahmad Roll # 7845 MBA 4th semseter pioneers NUML(Multan Campus)
  2. 4. Law of Partnership <ul><li>History: </li></ul><ul><li>Law of Partnership is contained in the Partnership Act, 1932 which came into force on 1 st October 1932. It extends to the whole of Pakistan (Sec.3) </li></ul>
  3. 5. What is Partnership?
  4. 6. Law of Partnership <ul><li>Definition : </li></ul><ul><li>“ A Partnership is a Voluntary association of two or persons, who contribute,money, Property, time, care or skills, to carry on, as co-owners, a lawful business for profits and to share the profits and losses of the business” </li></ul>
  5. 7. Law of Partnership <ul><li>Characteristics: </li></ul><ul><li>Legal entity </li></ul><ul><li>Agreement </li></ul><ul><li>Number of Partners </li></ul><ul><li>Existence of Business </li></ul><ul><li>Sharing of Profit </li></ul><ul><li>Unlimited Liability </li></ul><ul><li>Capital </li></ul>
  6. 8. Law of Partnership <ul><li>Good faith </li></ul><ul><li>Management </li></ul><ul><li>Control </li></ul><ul><li>Transfer of Interest </li></ul><ul><li>Duration </li></ul>
  7. 9. Law of Partnership <ul><li>Legal Entity: </li></ul><ul><li>A partnership has no separate legal entity apart from its members. </li></ul><ul><li>The firm and the partner are not separate from one another. </li></ul><ul><li>2. Agreement: </li></ul><ul><li>A partnership is the result of an agreement b/w persons </li></ul><ul><li>An agreement may be written or oral </li></ul>
  8. 10. Law of Partnership <ul><li>3. Number of Partners </li></ul><ul><li>There must be at least two persons to form a partnership </li></ul><ul><li>The maximum limit to the number of partners is 20 </li></ul><ul><li>4. Existence of Business: </li></ul><ul><li>The partners must agree to carry on a business </li></ul>
  9. 11. Law of Partnership <ul><li>5. Sharing of Profit ; </li></ul><ul><li>The agreement b/w the parties must be to share the profits of a business </li></ul><ul><li>Distribution of Profit will be among the partners according to their agreement </li></ul><ul><li>6. Unlimited Liability: </li></ul><ul><li>The liability of all the partners is unlimited in case of firm’s debt </li></ul>
  10. 12. Law of Partnership <ul><li>7. Capital: </li></ul><ul><li>The Capital of the firm is supplied by all the partners </li></ul><ul><li>In some cases not necessary to contribute the capital by all the partners </li></ul><ul><li>8. Good Faith : </li></ul><ul><li>A Partnership business is based on mutual </li></ul><ul><li>confidence and trust of the partners </li></ul>
  11. 13. Law of Partnership <ul><li>9 . Management: </li></ul><ul><li>Every Partner can take part in the conduct and management of the business of the firm </li></ul><ul><li>10. Control: </li></ul><ul><li>Control is depend on the terms of the firms </li></ul><ul><li>All partners take an active part in the conduct of the business </li></ul>
  12. 14. Law of Partnership <ul><li>11. Transfer of Interest: </li></ul><ul><li>Shares cannot be transfer to outsider without the </li></ul><ul><li>consensus of all the partners </li></ul><ul><li>12. Duration: </li></ul><ul><li>Partnership continues at the will of the partners </li></ul>
  13. 15. Kinds of Partners <ul><li>Active Partners </li></ul><ul><li>Sleeping Partners </li></ul><ul><li>Nominal Partners </li></ul><ul><li>Senior Partner </li></ul><ul><li>Junior Partner </li></ul><ul><li>Partner in Profit only </li></ul><ul><li>Secret Partner </li></ul><ul><li>Minor Partner </li></ul>
  14. 16. Kinds of Partners <ul><li>Active Partners: </li></ul><ul><li>Who takes active part in the management </li></ul><ul><li>2. Sleeping Partners : </li></ul><ul><li>Who not take active part in the management </li></ul><ul><li>3. Nominal Partner: </li></ul><ul><li>Who lends his name and reputation to the firm. </li></ul>
  15. 17. Kinds of Partners <ul><li>4. Senior Partner: </li></ul><ul><li>Who has a more investment in the firm and receive more profit </li></ul><ul><li>5. Junior Partner: </li></ul><ul><li>Opposite to the senior partner </li></ul><ul><li>Young person and recently join the partnership </li></ul>
  16. 18. Kinds of Partners <ul><li>6. Partner in Profit only : </li></ul><ul><li>Who share the profits of the firm but not liable for losses </li></ul><ul><li>7. Secret Partner: </li></ul><ul><li>Whose membership is kept secret from outsiders </li></ul><ul><li>8. Minor Partner: </li></ul><ul><li>A person who has not competed 18 year of age </li></ul>
  17. 19. Types of Partnership <ul><li>Partnership-at-will </li></ul><ul><li>2. Particular Partnership </li></ul><ul><li>3. Limited Partnership </li></ul>
  18. 20. Types of Partnership <ul><li>Partnership-at-will: </li></ul><ul><li>Where no provision is made in the agreement regarding the duration of the partnership </li></ul><ul><li>Any partner can terminate it any time by giving the notice </li></ul><ul><li>For unlimited period </li></ul><ul><li>Formed for particular project </li></ul>
  19. 21. Types of Partnership <ul><li>2. Particular Partnership: </li></ul><ul><li>When partnership is formed to </li></ul><ul><li>do a particular business or for a particular period </li></ul><ul><li>For example: partnership for work on the production of film </li></ul>
  20. 22. Types of Partnership <ul><li>3. Limited Partnership : </li></ul><ul><li>Formed in Act 1907of England </li></ul><ul><li>In Pakistan there is no limited partnership </li></ul><ul><li>Following are the features in Limited Partnership </li></ul><ul><li>One or more partners are with limited liability </li></ul><ul><li>At least one Partner with unlimited liability </li></ul><ul><li>The firm must be registered </li></ul><ul><li>Limited partners can inspect the books of the firm at any time </li></ul><ul><li>Limited partner cannot take active part in the management </li></ul>
  21. 23. Video Discussion <ul><li>The Five Key Factors can determine the viability to Any Business Partnership: </li></ul><ul><li>Values </li></ul><ul><li>How do you deal with the conflict </li></ul><ul><li>Work ethics </li></ul><ul><li>Integrity </li></ul><ul><li>Vision </li></ul>
  22. 24. <ul><li>“ If you don't like any rule, just follow it, reach the top and change the rule” </li></ul><ul><li>(Napoleons) </li></ul>Quote