INDIAN PARTNERSHIP ACT, 1934

BY-Aman Singh (IMBA/25016/11)Srishti Raj Karnot (IMBA/25031/11)Bhavin Tanwar (IMBA/25022/11)Aastha Rastogi (IMBA/25010/11)

“Partnership in India is governed by The Partnership Act, 1932 which had come into force on Oct 1,1932.”

REGISTRATION OF FIRMS:Registration of a firm requires the following

formalities to be fulfilled:

1. The name and the address of the firm,2. The principle place of business of the firm,3. Name of the other places (if any) where the

firm carries the business.

cont…..,4. The date on which each partner joined the

firm.5. The name and the address of each partner.6. The duration of the firm.

EFFECT OF NON-REGISTRATION: Non-registration of firm has the following

effects.1. A partner cannot bring a suit to enforce any

right.2. An unregistered firm cannot file a suit.3. An unregistered firm is not an illegal

association.

DEFINITION OF PARTNERSHIP:

Sec.4 of the Partnership Act 1932 defines partnership as, “The relation b/w persons who have agreed to share the profits of a business carried on by all or any of them acting for all.”

NATURE OF PARTNERSHIP:Following are some good deals about

partnership: An association of two or more persons. An agreement or a contract. It leads to business. It can be carried on by all or any one of

them. It is formed for sharing profits.

POSITION & RIGHTS OF A MINOR (SEC.13)

A minor cannot become a partner in the firm.A minor can be admitted to the benefits of

the firm.A minor can inspect the books of accounts.A minor is entitled to his agreed share of

profit.

Cont….,He will not be personally liable to the debts

of the firm.After attaining majority, he may become a

full-fledged partner of the firm.A minor who, thus becomes a partner will

become personally liable for all the debts & obligations of the firm.

ESSENTIALS OF PARTNERSHIP:Any business is considered as partnership

only if the following three essentials are present:

Agreement b/w two or more persons, Agreement to share profit as well as loss. Carried on by al or any one acting of them

acting for all.

TEST OF PARTNERSHIP:Creditor OR Partner Just by lending monies to the firm a person

cannot become the partner of the firm because he is only liable for the interest not for the profit earned by the firm.

……

…….

Partner OR Servant By earning remuneration, a person cannot

become a partner in the firm.

Share of Goodwill If a person has helped in selling the goodwill of

the firm and receiving incentive for the same, cannot be called a partner in the firm.

DUTIES OF PARTNERS:Following are some fundamental duties of all

the partners: To work for the greatest common advantage. To be just and faithful. To render true accounts. To give full information. To indemnify for fraud (sec.10).

…….

…….. To indemnify for fraud (sec.10). To indemnify for willful neglect (sec.23f). To share losses (sec.13b). To diligently attend the business (sec.12b &

13a) To account for private profits (sec.16 & 60) To act within authority. To not to assign share (sec. 29(1&2)).4 To account for the property of firms (sec.15).

DIFFERENCE B/W COMPANY & PARTNERSHIP:PARTNERSHIP COMPANY

It is governed by the partnership act 1932.

The rights & liabilities of partners are unlimited.

The firm has no legal or separate entity or rights.

A company is governed by the companies act 1956.

The rights & liabilities of shareholders restricts to the proportion of their share.

By registration, company becomes a separate legal entity.

PARTNERSHIP COMPANY

The firm cannot sue any other firm.

In case of partnership, there are rights & obligation as against individual person.

A company can sue the other company like any natural person.

In case of company, the rights & obligation are as against the factious, whole, the company not the members composing it.

DISSOLUTION (SEC.39)DISSOLUTION OF PARTNERSHIP:

DISSOLUTION OF PARTNERSHIP MAY TAKE PLACE:

By the expiry of the term (sec.42a)By the end of the adventure (sec.42b)By the death of a partner (sec.42c)By insolvency of any partner (sec.42d)By retirement of a partner.

DISSOLUTION OF THE PARTNERSHIP FIRM

DISSOLUTION OF THE FIRM MAY TAKE PLACE:

By mutual consent.By insolvency of all partners (sec.41a)By business becoming illegal (sec.41b)By notice of dissolution (sec.43)

DISSOLUTION THROUGH COURT (SEC.44)

PARTNERSHIP OR A PARTNERSHIP FIRM MAY BE DISSOLVED BY THE ORDERS OF THE COURT IN CASE: When a partner becomes of unsound mind. Permanent incapacity of partner. Persistent disregard of partnership agreement by

a partner. Business working at loss. Misconduct of a partner affecting the business. Transfer of interest or share by a partner.

THANK YOU