what is partnership in law.

1. TOPIC
Presented bY:
Mishal
Mushtaq(029)
law of partnership

2. PARTNERSHIP BY LAW
 Partnership act came into force on 1st October 1932
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MEANING & DEFINITION
 Consist of two or more individuals who combine
their resources to form a business and agree to
share risk, profits & losses.

3. CHARACTERISTICS OF PARTNERSHIP
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 Legal entity
 Agreement
 Number of partners(2 t0 20)
 Existence of business
 Sharing profits
 Mutual agency (agent & principal)
 Capital (Partner based on skills)
 Utmost faith (disclose all facts)
 Management (skills, experience)
 Control (formed by agreement)
 Transfer of ownership (not freely)
 Duration (death, insolvency)

4. ADVANTAGES OF PARTNERSHIP
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5. DISADVANTAGES OF PARTNERSHIP
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6. TESTING PARTNERSHIP
 There must be an agreement among the persons to be held as partners.
 The agreement must be for doing some business.
 The agreement must be to share the profits of a business.
 There must be a relationship between principal and agent among the partners.
 There must be an agreement to carry on the business by all or any of them acting
for all

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FIRM NAME
FIRM
The person who has entered into a partnership with one another is collectively called a firm .
The name under which partners carry on their business is called the firm's name. The partners can choose any
name for the firm according to the following rules: (Sec. 58)
The name must not be identical or similar to the name of an existing firm.
The name must not contain the words 'Government', 'Jinnah', 'Quaid-e-Azam' or words showing the approval or
patronage of the Federal Government or any Provincial Government, without the consent of the provincial government.
A firm name must not contain the name of 'United Nations' or abbreviations of its subsidiary body without the sanction
of the Secretary-General of the UNO.
A firm name must not contain the name of the "World Health Organization or its abbreviations without the sanction of
the Director-General of WHO.

8. IDEAL PARTNERSHIP
 Mutual Understanding
 Common purpose
 Sufficient capital
 Number of partners
 Written agreement
 Registration
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9. TYPES OF PARTNERS
Junior partner
Seeping Partner
Partner in profit only
Nominal Partner
Secret partner​
Senior Partner​
Minor Partner
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Active Partner

10. MINOR
/
Position During Minority
/
Position after majority​
/
The decision to become a partner or
not
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Difference b/w Partnership & co-ownership ​
Agreement
Agency
Lien
Transfer of control
Common interest
Number of members
Business
Partition
Refund
Sharing of profits
Regulations

12. FORMATION OF
PARTNERSHIP
There must be an agreement among the partners to form a partnership. The
agreement may be in writing or oral. The following points must be considered
before entering into an agreement of partnership:
1. The partners of a firm should be selected with care
2. The object of the firm should be lawful.
3. The rights and duties of partners must be discussed in detail and in writing.
4. The partnership should be registered. If it is unregistered, it will create
problems
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PARTNERSHIP DEED
The partnership agreement in writing is called a partnership deed. It is better to have a
written agreement. The partnership deed generally contains the following provisions:
1. The name of the firm
2. The names and addresses of all partners
3. The nature of business of the firm
4. The town and place where the business will be carried on.
5. The amount of capital invested by each partner
6. The duration of the partnership.

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CON…….
7. The ratio of sharing profits and losses.
8. The rate of interest, if any, allowed on capital.
9. The rate of interest on advances given by partners.
10. The rate of interest to be charged on drawings.
11. The amount, a partner can withdraw from the firm
12. The amount of salary or commission payable to any partner for his services.
13. The circumstances under which a firm shall dissolve.

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CON……
14. The rights, duties, and liabilities of partners.
15. The method of valuation of goodwill.
16. The period of the accounting year.
17. The rules regarding retirement, death, and admission of a partner.
19. Power of a partner to retire after giving notice.
20. The rules to determine the amount due to the deceased partner and manner of payment.
21. The rules of expulsion of partner from the firm,
22. The keeping of proper books of a count and preparation of accounts.