INDIAN PARTNERSHIP ACT, 1932

Presented to: Prof. (Dr.) S.N. BanerjeePresented By: Nikhar Agrawal

Partnership

Under section 4 of Indian Partnership Act 1932, “Partnership is an agreement between two or more persons who have agreed to share profits and loses of the business carried on by all or anyone of them acting upon all"

Essentials Of The Partnership Agreement

• The partnership agreement should have the following items:– The exact identity of each of the member of the

partnership.– The legal name under which the business of the

partnership is to be conducted.– The purpose for which partnership has been

formed.– The contributions of property which are to be made

to the partnership by each partner.

– The way in which profit and losses are to be divided among the partners.

– The method of accounting which is to be used to determine partnership profits or losses.

– The level of cash withdrawal which are to be permitted.

– The responsibility of each partner to the business and is role in the management of the partnership.

– The rights and duties of each partner according to partnership law and by agreement among the partners.

– The condition under which a dissolution of the partnership will be considered to occur as well as those circumstances which will not dissolve the partnership.

– The method of solving disagreement among the partners.

Rights Of The Partner

• Take part in the conduct of business.• To share equally in the profits of the business.• To access to and to inspect and copy from any

books of the firm.• To be joint owner of the property of the firm.• In emergency, take all actions to safeguard firm.• To resist introduction or admission of new

partner.• Right not to be expelled.

Duties Of The Partner

• General Duties: To carry on the business of the firm, to be just and faithful, to give true accounts and complete information.

• To indemnify the firm for the loss caused by him during the conduct of the firm’s business.

• To contribute to the losses of the firm in equal proportion.

• Not to assign his own share to some other party.• To attend to his duties diligently.

Types Of Partner

• Sleeping partner or dormant partner- Partner who does not take any active part in the management of the business. He contributes capital and shares the profits which is usually less than that of the active partners.

• Nominal partner- A partner who simply lends his name to the firm is called nominal partner. He neither contributes any capital nor shares in the profits or take part the management of the business.

• Sub Partner- He is simply a partners' partner. Therefore, he has no rights again the firm nor he is liable for the debts of the firm. He only shares profits from a partner.

• Working or Active partner- Partner who takes an active part in the management of the business and considered a full fledged partner in the real sense of the term.

Minor As A Partner

A person who is a minor according to the law to which he is subject may not be a partner in a firm, but, with the consent of all the partners for the time being, he may be admitted to the benefits of partnership.