2. Definition of Partnership According to sec. 4 of the Indian Partnership Act, 1932- “Partnership” is the relation between persons who have agreed to share the profits of a business carried on by all or any of them acting for all. Partners, firm, firm name: Partners: Person entered into partnership individually Firm: Collectively a firm Firm name: The name under which the business is carried
3. Indian Partnership Act, 1932 Received the assent of the Governor-General on 8th April 1932. Came into force on the 1st day of October, 1932.
4. MEANING AND NATURE OF PARTNERSHIP Association of two or more than two persons. Result of an agreement between two or more persons. Agreement must be to share profit of the business. Business must be carried on by all or any of them acting for all. Unlimited liability. Restriction on transfer of interest. Unanimity of consent. Agreement must be to carry on some business
5. FORMATION OF PARTNERSHIP Agreement: orally, written or may be implied. Must be free and genuine consent. Object should be law full and complied with legal formalities. Points to be noted: Minor partners:- admitted to the benefits. Consideration to create partnership
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7. Types of Partnerships Partnership at Will No provision in contract between the partners for Duration of Partnership Determination of Partnership If any partner gives notice of dissolution in writing, the partnership is dissolved.
8. Types of Partnerships Particular Partnership A person may become a partner with another person in particular adventures or undertakings. On completion of such a venture, the partnership comes to an end.
9. Types of Partnerships Partnership for a Fixed Term Duration is fixed Partnership comes to an end when the term expires. If Partners continue the business after the fixed period, it becomes partnership at will.
10. Classes of Partners Actual or Active Partner Engaged in actual conduct of the business His acts binds the firm and other partners Notice to be given in case of retirement Sleeping or Dormant Partner Does not take part in the conduct of business Contributes his share of capital and enjoys profits and losses Not known to outside world Not liable to third parties for the acts of the firm. Not required to give notice in case of retirement
11. Classes of Partners Nominal Partners No real interest in business, Does not contribute any capital, Lends his name only No share in profits but liable to third parties for all acts of the firm Partner in Profits only Shares the profits but not losses No interest in the management of the firm Liability for the acts of the firm is unlimited
12. INCOMING PARTNERS No person shall be introduced as a partner into the firm without the consent of all existing partners… A person who is introduced as a partner into a firm does not thereby become liable for any act of the firm done before he becomes partner…
13. OUTGOING PARTNERS A person may retire ->With the consent of all other partners. ->In accordance with an express agreement by the partners or -> Where the partnership is at will by giving notice in written to all the other partners of his intension to retire
14. Classes of Partners Partner by Estoppel or Holding Out Represents himself as a Partner, by words spoken or written or by conduct Liable as a partner if credit is given to the firm based on his representation. He cannot deny. If a partner does not give public notice and his name is still used in the business, he is also liable to third parties Deceased partner is an exception to this rule.
15. DISSOLUTION OF FIRM AND PARTNERSHIP Sec 39 “dissolution of partnership between all the partners of a firm is called the dissolution of firm”. Dissolution of partnership. Dissolution of firm. Dissolution by court.
16. DISSOLUTION OF PARTNERSHIP Expiry of term. Completion of adventure. Death of a partner. Insolvency of partner. Retirement of a partner.
17. DISSOLUTION OF FIRM By mutual consent. By agreement. By the insolvency of all the partners. Business becoming illegal.
18. DISSOLUTION BY COURT partner has become of unsound mind. Permanent incapacity of a partner. Misconduct of a partner affecting the business. Transfer of interest or share by a partner.
19. RELATIONS OF PARTNERS TO ONE ANOTHER Right of partner. Duties of partner. Firm property. firm’s goodwill.
20. RELATIONS OF PARTNER TO THIRD PARTIES Implied authority of a partner. Matters in which there is no implied authority. Liabilities of a partner.
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22. THANK YOU ALL FOR YOUR PARTICIPATION IN THIS PROGRAMME
