THE INDIAN PARTNERSHIP ACT,

1932

PRESENTED BY: KIRAN A. PATHADE

SRO0392747BATCH NO.: 69

CONTENTS

Definition of partnership Features of partnership Cases where no partnership exists Classification of partnership Types of partners Partnership deed Registration of partnership firm Effects of non-registration Rights of a partner Reconstitution Dissolution

DEFINITION OF PARTNERSHIPAs defined by Partnership Act 1932:

The relation between the persons who have agreed to share the profits of the business carried on by all or any one of them

acting for all.

Features of a Partnership firm

Agreement Association of two or more persons There must be some business There must be sharing of profits Mutual agency

CLASSIFICATION OF PARTNERSHIP

PARTNERSHIP MAY BE CLASSIFIED ON THE BASIS OF THE FOLLOWING

On the basis of duration On the basis of the extent of the business

On the basis of duration

•Partnership at will •Partnership for a fixed period

On the basis of extent of

business

•Particular partnership•General partnership

TYPES OF PARTNERS Active partner

Dormant partner

Nominal partner

Partner in profits only

Sub-partner

Partner by estoppel

Partner by holding out

PARTNERSHIP DEED

The agreement creating a partnership may be implied or expressed. However, to avoid further disputes, it is always better to have an agreement in writing. Such an agreement in writing is called a “partnership deed”

REGISTRATION OF PARTNERSHIP FIRM

Particulars to be filled in while registration Name of the firm The place or principle place of the business The date on which each partner joined the firm The name(in full) and the permanent address

of the partners The duration of the firm, if any The application must be signed by all the

partners.

EFFECTS OF NON-REGISTRATION

No suit against other partners and firm No suit by the firm against third parties No claim to a set off

RIGHTS A PARTNERRight to take part in the conduct of the

business

Right to be consulted

Right to remuneration

Right to interest on capital

Right to interests on advances

Right to share profits

Right to access the books of accounts’

Right to be indemnified Right to be consulted at the time of

admission of a new partner

Right to use partnership property

Right not to be expelled

Right to retire

Right to share subsequent profits

RECONSTITUTIONA firm is said to be reconstituted, when the following occurs and the firm continues:

Admission of a partner Retirement of a partner Expulsion of a partner Insolvency of a partner Death of a partner Transfer of partners share

DISSOLUTION OF A FIRM

According to section 39, “the dissolution of partnership between all the partners of a firm is called dissolution of firm”. Dissolution of a firm marks the end of the functioning life of the firm. It discharges the contract which was created among the partners.

DISSOLUTION OF A FIRMDissolution without the intervention of

court (voluntary dissolution) Dissolution by consent of all partners Dissolution by contract between the partners Dissolution on happening of certain contingencies Compulsory dissolution Dissolution by notice

Dissolution With intervention of court (court order)

Insanity of a partner Permanent incapacity Misconduct Persistent breach of agreement Transfer of interest Continuous losses Just and equitable grounds

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