Presentation Transcript

1. INDIAN PARTNERSHIP ACT 1932 Presentation by: NehaMalviya MBA :C.C Kartikeyashukla MBA : AMC
2. THE INDIAN PARTNERSHIP ACT’ 1932 Section.4 of the Indian Partnership Act, 1932 defines Partnership in the following terms: “ 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.” It is clear from the definition of partnership that there should be agreement between the partners. the business should be conducted by all the partners or by any one for all.
3. ESSENTIAL ELEMENTS OF A PARTNERSHIP a.) There must be a contract. b.) Between two or more persons. c.) Who agree to carry on business. d.) With the object of sharing profits. e.) The business must be carried on by all or any of them acting for all.
4. PARTNERSHIP DEED A partnership can be formed either by oral or written agreement, but for the long term interest & smooth running of the business, it is desirable to enter into a written agreement which is called partnership deed. Agreement in writing will minimize the dispute and can be referred to whenever required, each partner should possess a copy of the deed.
5. Partnership deed Who may not be partners? Agreement having oral or written form of document. Principal place of business. Firms name. Partners name and address. Duration of partnership Profit sharing ratio Capital of partners Valuation of goodwill. Minor Person of unsound mind. Member of Hindu undivided family carrying on family business.
6. KINDS OF PARTNERSHIP Partnership at will: Where no provision is made by contract between the partners for the duration of their partnership, the partnership is ‘partnership at will.’ The essence of a partnership at will is that the partners do not fix any term of partnership and are free to break their relationship at their own will. It is a partnership for an indefinite period
7. Continued… Particular partnership: When a partnership is formed for a particular period or for a particular venture, it is called particular partnership. In such a case, the partnership is automatically dissolved at the expiry of the fixed term or on the completion of the venture.
8. TYPES OF PARTNER Actual or active partner Engaged in actual conduct of the business His act bind the firm and other partners. Notice to be given in case of retirement. Sleeping or dormant partner Does not take part in conduct of business. Contribute his share of capital and enjoy profit and losses. Not known to outside world Not liable to third parties for the act of the firm. Not required to give notice in case of retirement.
9. Continued… Nominal partner: No real interest on business, does not contribute any capital, lend his name only. No share in profits but liable to third parties for all the act of the firm. Partners in profit only: Shares the profit but not losses No interest in the management of the firm Liability for the act of firm is unlimited.
10. RIGHTS OF PARTNERS Partners Right to take part in the conduct of the business. Right to be consulted. Right to access the books. (i.e books of Accounts) Right to share the profits. Right to interest on capital Right to sign cheque.
11. INCOMING PARTNER No person shall be introduce as a partner into the firm without the consent of all existing partners… A person who is introduce as a partner into a firm does not thereby become liable for any act of the firm done before he become partner…
12. OUTGOING PARTNER A person may retire With the consent of all the partners. Mutual disputes in case of partnership at will, a partner after giving a notice in written to all the other partners can retire from the partnership. To start an independent business. To enter into another business.
13. RETIREMENT OF THE PARTNER A Partner is said to retire when the surviving partners continue to carry the business of the firm, and the retiring member cease to be a partner. In case of ‘particular partnership’, a partner may retire with the consent of all the other partners, unless otherwise agreed. In case of ‘partnership at will’, a partner may retire by giving a notice in writing to all the other partners of his intention to retire, unless otherwise agreed.
14. CONTINUED…. A retiring partner continues to be liable for the acts of the firm done before his retirement. He may, however, free himself from his liability towards the third parties for the debts of the firm incurred before his retirement by an agreement with such third parties. The remaining partners alone cannot give this freedom to the retiring partners. He may be discharged if the creditors agree.
15. INSOLVENCY OF THE PARTNER When a partner in the firm is adjudicated as insolvent, he ceases to be a partner on the date on which the order of adjudication is made, whether or not the firm is thereby dissolved will depend upon the agreement of partnership between the partners. The insolvent partner’s share in the firm’s assets will be used for firm’s debts first and whatever remains will be utilized for the insolvent partner’s personal debts.
16. DEATH OF THE PARTNER Although on the death of a partner, the firm is dissolved, but if the other partners so agree the firm may not be dissolved. When a firm is not dissolved, the estate of the deceased partner is not liable for any acts of the firm done after his death. No public notice of death is required to relieve the deceased partner’s estate from future obligations.
17. REGISTRATION OF FIRMS Under the partnership Act, it is not compulsory for every partnership firm to get itself registered. But an unregistered firm suffers from a number of disabilities. An application in the prescribed format along with the prescribed fees has to be submitted to the Registrar of firms of the State in which the place of business of the firm is situated. The application must be signed by all the partners and must contain the following particulars: a.) The name of the firm. b.) The place of business of the firm. c.) The names of any other places where the business of the firm is carried on. d.) The date when each partner joined the firm. e.) The names in full and permanent addresses of the partners.
18. EFFECT OF NON REGISTRATION Effect of non registration 1. No suit in civil court by a partner against the firm or other partners. 2. No suit in a civil court by a firm against the parties. 3. The firm or its partners cannot make a claim of set-off or other proceeding based upon a contract.
19. DISSOLUTION OF PARTNERSHIP Expiry of term.( duration of partnership) Completion of venture. Death of a partner. Insolvency of partner. Retirement of a partner.
20. DISSOLUTION OF THE FIRM When the relationship between all the partners of the firm comes to an end, it is called dissolution of the firm .it naturally involves closing down the business. A firm may be dissolved in any of the following ways: By mutual consent. By agreement By the insolvency of all the partners Business becoming illegal.
21. DISSOLUTION BY COURT Dissolution by the court is necessitated when there is a difference of opinion between the partners regarding the matter of dissolution in cases of Partner have become of unsound minded. Permanent incapacity of partner. Misconduct of the partner affecting the business. Transfer of interest or share by a partner.
22. REFERENCE Legal aspects of business management Book keeping and accountancy by rathi,kusumakar,dalmia Elements of commerce and management by m.s.parmar, shikha shah.
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