Law+Of+Partnership

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Law+Of+Partnership

  1. 1. Law of Partnership What is partnership –Section 4 Essential elements of partnership Agreement Sharing profit of business Business carried on by all or any of them acting for all Partnership distinguished from other forms of organization Partnership vs. Joint stock company Personality Agency Distribution of profits Extent of liability Property Transfer of shares Management Number of membership Partnership vs. Club Profit not the motive Not liable to creditors No interest in the property of the Club Change in membership Partnership vs. HUF Creation Death Management Liability Calling of accounts Governing Law Minor’s capacity Continuity Partnership vs. Co-ownership Partnership vs. Association
  2. 2. Types of partners Active Sleeping Nominal ‘By holding out’ Section 28 Sub- partnership Minor’s position in partnership Rights Liabilities Mutual rights and duties of partners Rights To take part in the conduct of business To be consulted -Section 12(c) To access to books To remuneration To share profit-Section 13(b) Interest on capital-Section 13(c) Interest on advances-Section 13(d) To be indemnified-Section 13(e) To stop admission of a new partner-Section 31 Right to retire-Section 32(1) Right not to be expelled-Section 33 Right of outgoing partner to carry on competing business- Section 36(1) Right of outgoing partner to share subsequent profits- Section 37 Right to dissolve the firm-Section 40 Duties To carry on business, greatest common advantage, render true account-Section 9 To indemnify damages by reason of his fraud-Section 10 To diligently attend his duties-Section 12(b) To account for personal profits –Section 16(a)
  3. 3. Partnership property Property, rights and interests brought by the partners Property, rights and interests acquired by the firm Goodwill of the business – Section 14 Personal profits earned by partners– Section 16 Rights and duties of partners after a change in the constitution of the firm– Section 17 Relation of partners to third parties– Sections 18 to 30 Implied authority of a partner– Section 19(1) to 22 Cannot submit a dispute Cannot open a bank account Cannot compromise or relinquish any claim Cannot withdraw a suit Cannot admit any liability in a suit proceedings Cannot acquire or transfer immovable property Cannot enter into partnership on behalf of the firm Extension and restriction on partner’s implied authority – Section 20 Acts in Emergency - Section 21 Notice to an acting partner- its effect Section 24 Liabilities of third parties Section 25 to 27 Contractual liability Liability for tort or wrongful acts Liability for misappropriation by a partner Legal consequences of partners coming in and going out- Section 31 to 38 Introduction of a new partner – Section 31 Retirement of a partner – Section 32 Expulsion of a partner – Section 33 Insolvency of a partner – Section 34 Death of a partner – section 35
  4. 4. Revocation of continuing guarantee by change in the firm – Section 38 Modes of effecting registration Not necessary At any time – Section 58 Consequences of non-registration Disabilities - Section 69 Dissolution of firm- Sections 39 to 44 Consequences of dissolution – Sections 45 to 52 Mode of giving public notice – Section 72

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