PARTNERSHIP ?

1. PARTNERSHIP ? • It is the relationship between persons who have agreed to share the profits of a business carried on by all or any of them acting for all • It is not a separate legal entity • It must be for some lawful business • The contract may be written or oral • The business must be carried out to earn and share profits and returns of the business

2. TYPES OF PARTNERSHIP • Partnership at will • Partnership for a fixed period • Particular partnership

3. RIGHTS AND LIABILITIES OF PARTNERS • To indemnify the firm for any loss caused to the firm by his fraud in the conduct • Every partner to attend to his duties as per the contract between them • To share equally the profit or loss made by the firm • Every partner has a right to access the books of the firm and inspect it

4. CONTINUED • The property of the firm is the properties acquired from the partnership funds. It should be used exclusively for the use of firm’s business ordinarily. • The firm has to indemnify a partner in respect of payments made and libilities incurred by him in proper conduct of the business or doing some emergency acts to protect the firm from incurring any loss.

5. CONTINUED • Every partner is principal on his own behalf and agent on behalf of other partners • Implied authority of partner as an agent of the firm • Any partners implied authority can be extended or restricted by mutual agreement • Every partner is jointly and severally liable for all the acts of firm

6. CONTINUED • If a person who is not a partner, knowingly represents himself as a partner in a firm and he induces others to give credit to the firm, is known as “partner holding out”. He is liable personally for the debts of the firm as he was a partner in the firm. • A transfer by a partner of his interest in the firm does not entitle transferee to interfere in the business but only to receive share of profits of transferor

7. MINOR IN P’SHIP FIRM • A minor cannot be a partner, but with the consent of all the partners can be admitted to the benefits of the partnership. • Minor can not be made a party to the liabilities of the firm, but his share will be • Minor can access the accounts of the firm • Minor has to declare his intentions within 06 months from the date of attaining majority (or knowledge of him being a partner whichever is later) to become a partner or not.

8. DISSOLUTION OF A FIRM • By agreement (compulsory) • If all the partners (except one) are adjudicated insolvent or the business has become unlawful. • By the death of a partner (optional) • By the adjudication of a partner as an insolvent • Dissolution by court

9. INDIAN PARTNERSHIP ACT,1932 Sec19: Each partner is an accredited agent to the firm and other partners Sec20: Partners by contract can extend or restrict the implied authority of a partner Sec25: Every partner is liable jointly with all other partners & severally for all the acts done by the firm while he is a partner Sec30: A minor may be admitted only to the benefits of a partnership

10. INDIAN PARTNERSHIP ACT (contd) Sec42: Dissolution of partnership firm on the happening of death/ insolvency/insanity of a partner Sec68: Registration of a partnership is optional Sec69: Effects of non-registration of the firm

11. INDIAN PARTNERSHIP ACT,1956 Sec11: Prohibition of associates and partnerships exceeding 10 for firms carrying on the business of banking & 20 for firms carrying on any other business Sec125(1)(d): Charge created on the assets of a company should be registered within 30 days of its creation Sec130(3): A search in registrars office regarding existence of prior charge over the company’s assets should be made before granting advances to a company