RIGHTS AND DUTIES OF PARTNERSHIP
Transcript of RIGHTS AND DUTIES OF PARTNERSHIP
RIGHTS AND DUTIES OF
PARTNERSHIP
BY: NITISHU SHARMA
WHAT IS PARTNERSHIP?
SEC. 4
PARTNERSHIP IS THE RELATION BETWEEN PERSONS WHO ARE AGREED TO SHARE THE PROFITS OF A
BUSINESS CARRIED ON BY ALL OR ANY OF THEM
ACTING FOR ALL.
FEATURES OF THE PARTNERSHIP
There must be a contract
Between two or more persons
Who agree to carry on a business
With the object of sharing profits
The business must be carried on by
All Or any of them acting for all.
And it’s object should must be lawful.
RIGHTS OF THE PARTNERSHIP
RIGHT TO SHARE PROFITS{sec.13(b) }
In the absence of an agreement to the
contrary every
partner is entitled to
share the profits
equally.
RIGHT TO TAKE PART IN THE CONDUCT OF BUSINESS {sec.12(a) }
This right is not available to some of
the partner then they
have no right to take
part in the
Management of the business Firm.
RIGHT TO BE CONSULTED {sec.12(c) }
Every partner has the right to express
His opinion before
any decision is taken
by the other
partners.
RIGHT TO ACCESS TO BOOKS {Sec.12(d) }
Unless there is an agreement to the
contrary every
partner has a right to
access and the
inspect any of the book from the firm.
RIGHT TO REMUNERATION {sec.13(a) }
No partner is entitled to receive any
remuneration in
addition to share in
the profit of the firm
for taking part in the business of the firm.
INTEREST ON CAPITAL {sec.13(c) }
The interest on the capital may be paid
to them if there is an
express agreement to
pay interest on
capital.
RIGHT TO INTEREST ON ADVANCES {sec.13(d) }
Where partner makes an advance to the firm in the addition to the amount of capital he has agreed to subscribe, he is entitled to claim interest there an at the rate of 6% per anum.
RIGHT TO RETIRE {sec.32(1) }
Every partner of a partnership firm has the right to withdraw from the business with the consent of all the other partners.
RIGHT NOT TO BE EXPELLED (sec.33)
A partner cannot be
dismissed from the firm by by an majority of the
partners unless conferred by a partnership agreement and
exercised in good faith.
RIGHT OF A OUTGOING PARTNER TO CARRY ON A COMPETING BUSINESS
{sec.36(1) }
A partner outgoing from
the partnership firm may carry on a business
competing with that of the firm. The partner may even advertise such
activity but has to do so without using the firms
name.
RIGHT OF OUTGOING PARTNER TO SHARE SUBSEQUENT PROFITS
(sec.37)
If the partner has passed away or
ceased to be a partner, the right
to such share of profit made since
he ceased to be a partner as
may be attributed to the use of his share of the property of the firm or
interest at 6% per annum on the
amount of the partners share in
the property of the firm.
RIGHT TO DISSOLVE THE FIRM (sec.40)
Partner of the partnership firm has
the right to dissolve the
partnership with the consent of all
the other partners.
However the partnership is at will,
the firm may be dissolved by any
partner by giving notice in writing to all the partners with intention to
dissolve the firm.
RIGHT TO STOP ADMISSION OF A NEW PARTNER (sec.31)
Every partner has a right to be consulted at the time of admitting a new partner to the firm. A new partner cannot be admitted without consulting all the existing partners.
RIGHT TO BE INDEMNIFIED {sec.13(e) }
Every partner has the right to be indemnified by the firm in respect of payments made and liabilities incurred by him in the ordinary and proper conduct of the business firm. In the performance of an act in an emergency for protecting the firm from any loss as would be done by a prudent man under similar circumstances.
DUTIES OF THE PARTNER
TO OBSERVE GOOD FAITH
Section 9
It is an absolute provision and it is not possible for
any partner to contract himself out even by an
agreement with the other partners.
TO INDEMNIFY FOR LOSS
Section 10
Every every partner shall indemnify the fIrm for any
loss caused to it by his fraud in the conduct of
the business of the firm.
TO ATTEND TO HIS DUTIES DILIGENTLY
Every partner is bound to attend
diligently to his duties
in conducting the
business of the firm.
NOT TO CLAIM REMUNERATION
It is the prime duty of the partner to take
part in the
Management Of the
partnership business.
TO INDEMNIFY FOR WILLFUL NEGLECTSection 13(f)
A partner of partnership firm must be
Compensate the firm for any damages
Or loss caused to it by willful neglect in
the conduct of the business of the firm.
TO SHARE LOSSESSection 13(b)
All the partners of a partnership firm are liable to contribute equally to the injury sustained by the
firm.
TO ACCOUNT FOR ANY PROFITSection 16(a)
If a partner of a partnership firm derives any profit for himself for any transaction of the firm or
from the use of the property or business
connections of the firm or firms name, then the
partner is bound to account for that profit and
refund it to the firm.
TO ACCOUNT AND PAY FOR PROFITS OF
COMPETING FOR BUSINESSSection 16(b)
If a partner carries on a company of the same nature as the firm and competes with that of the
firm the partner must be accountable for and
pay to the firm all the profits made in the
business by the Partner. The partnership firm will
not be held liable for losses caused in the business.
TO ACT WITHIN AUTHORITYA partner is required to act within the scope pf
his actual or apparent authority. If he act
excessively and the other partners do not ratify
his unauthorized acts, he will be liable to the
other partners for the loss that they may suffer as
a result of such acts.
NOT TO ASSIGN HIS RIGHTSA partner cannot assign his rights or interests in a
partnership firm to an outsider, so as to make
the outsider, a partner in the firms business
without the consent of other partners.
TO HOLD AND USE PROPERTY OF THE
FIRM
One of the important duties of partners in a partnership is using property of the firm
exclusively to conduct partnership business. The
partners may agree differently. But it should be
supported by a specific agreement to that
effect.
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