Dive deep into the Indian Partnership Act, 1932 and understand the rights and duties of Partners

1. Partnership
Essentials
Unpacking the Indian Partnership
Act 1932 with a Focus on Rights, Duties,
and Types"
ASSIGNMENTI

2. TABLE OF
CONTENT
• Introduction
• Type of Partners
• Rights of Partners
• Duties of Partner
• Q & A
• End of Presentation

3. INTRODUCTION
Indian Partnership Act
1932
• Partnership
• Enforcement of Act 1932
(as on 1st october , 1932)
• There are total 74 sections in this act
• Only section 69 were added in 1933 after an year of
enforcement

4. 1.Active partner : Contributes capital participates in the management and
affairs of the business shares the profits and losses of the business liability is
unlimited.
2.Sleeping partner : Contributes capital does not participate in the
management and affairs of the business shares the profits and losses of the
business liability is unlimited.
3.Secret partner : Association with the firm is not known to the general public
contributes capital shares profits and losses participates in the management
of the business liability is unlimited
4.Partner in Profits Only : Only share the profits of the firm not be liable for any
liabilities. when dealing with third parties he will be liable for all acts of profit
only he will share none of the liabilities.
TYPES OF
PARTNERS

5. 5. Secret Partner : A secret partner refers to -
·Invest capital in business.
·Participate in management activities but secretly.
·Enjoy profit and share losses.
·Participation is not publicly disclosed.
6. Partner by estoppel or holding out : Partner by holding out: Partnership by
holding out is also known as partnership by estoppel.
1. When a person represents himself or knowingly permits himself
2. To be represented as a partner in a firm (when in fact he is not)
3. He is liable, like a partner in the firm.

6. Example 6: X and Y are partners in a partnership firm. X introduced A, a
manager, as his partner to Z. A remained silent. Z, a trader believing A as
partner supplied 100 T.V sets to the firm on credit. After expiry of credit period,
Z did not get amount of T.V sets sold to the partnership firm. Z filed a suit
against X and A for the recovery of price. Here, in the given case, A, the
Manager is also liable for the price because he becomes a partner by holding
out (Section 28, Indian Partnership Act, 1932).
7. Minor partner : A person who is a minor according to the law to which he is
subject may not be a partner in a firm, but with the consent of all the partners
for the time being, he may be admitted to the benefits of partnership.
8. Sub partner :
1. Partner agrees to share his share of profits in a partnership firm with an
outsider; such an outsider is called a sub-partner.
2. Neither has rights against the firm nor is he liable for the debts of the firm.

7. 1 . General duties of a partner :- Every Partner shall be bound to carry on the business of the firm -
(1) to the greatest common advantage,
(ii) to be just and faithfulto each other and
(iii) to renderto any partner or his legal representativea trueaccount and full informationof all things affecting
the firm
2. To indemnify:- Every partner is liable to indemnify the firm for any damage caused to it by reason of his fraud in
the conduct of the business of the firm
3. To attend duties diligentlywithout remuneration:- Every partner shall be liable to attend diligentlyto his duties
relatingto the business of firm
4. Not to carry on any competing business:- Unless an agreement expressly allows this, no partner is entitled to carry
on any business competing with that of firm. If withoutany agreement,any partner carry on such business
personally;in addition to firm, then all profit earned by him in said business shall be accounted for in the firm in
whichhe is a partner.
DUTIES OF
PARTNERS

8. 5. To share losses :- All the partners are liable to contribute equally to the loss
sustained by the firm.
6. Duty to account for any personal profit :- Incase any partner has obtained
any profit out of any transaction of the firm or from the use of the property
of
the firm, he shall account for that profit and pay it to the firm.

9. RIGHTS OF
PARTNERS
• Right to take part in the conduct of business [Section 12 (a)]– All the
partners in the partnership firm have the equal right to take part in the
business.
• Right to express opinion [Section 12(c)]- All the partners are allowed to
express their opinions freely.
• Right to access books and accounts [section 12(d)]- All the partners can
inspect books of the firm and can take out copies thereof.
• Right to remuneration [Section 13(a)]- No partner in a firm is entitled to
claim remuneration for taking part in the conduct of business.
• Right to share profits [section 13(b)]- All the partners are entitled to share
the profits and losses equally irrespective of what they have contributed to
the firm.
• Right to interest on capital [section 13(c)]- A partner is not entitled to claim
interest on capital if it is not mention in partnership deed.

10. 7. Right to interest on advances [section 13(d)]- a partner is entitled to get the
interest of 6%p.a. for the advances made by him.
8. Right to be indemnified [section 13(e)]- A partner is entitled to claim
expenses made in ordinary conduct of business or in case of emergency.
9. Right to stop admission of a new partner (section 30)- Every partner has the
right to prevent the introduction of a new partner in the firm.
10. Right to retire- [section 32 (1)] every partner has the right to retire with the
consent of all the partners.
11. Right to dissolve the firm [ section 40]- a partner has the right to dissolve the
partnership with the consent of all partners.

11. Welcome
House is open for The Questions

12. THANK YOU
Presentation details
Presentation name :- Partnership under Act 1932
Subject :- Legal Aspect of Business
Under guidance of :- Dr. Manju Nandal
Presented by:-
Shrishti Jain