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I would like to say a big thanks to my respectable teacher on behalf of my all group members, who gave us this huge learning opportunity to enhance our knowledge.

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BILAL HAMEEDABUZER SABARFAISAL LIAQATMUHAMMAD JAZIB JAVEDMUHAMMAD ALI SHAHIDALI HASSAN RAZAHUSNAIN IRSHAD

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PartnershipPartnership agreementRights of a partnerDuties & Liabilities of a partnersLimited liability & Unlimited liabilityPersonal profit earned by partnerImplied authorityAct of Holding out

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Types of partnersMinor partnerRights and liabilities of minor partnersHow to reconstitute a partnership firm?Dissolution of partnership firmRights & liabilities of partners after dissolution of partnership

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A partnership is the relationship between two or more persons who join to carry on a trade or business. Each person contributes money, property, labor or skill, and expects to share in the profits and losses of the business.A partnership combines

Of the partners

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Apartnership agreementis the written and legalagreementbetween business partners. It is always recommended but not essential for partners to have such anagreement.

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Name and address of partnership.Duration of partnershippartners can point to a specific termination date or include a general clause explaining that the partnership will exist until all partners agree to dissolve it or a partner dies.Business purposefor example, to purchase and lease out residential real estate.Bank account informationthis section should note which bank accounts are to be used for partnership purposes, and which partners have check-signing privileges.Partners' contributionsvaluation of all contributions, whether in cash, property or services.

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Partners' compensationdetermine in detail how and when profits (and salaries, if applicable) will be distributed.Management authoritywhat are the operational responsibilities of each partner? Will partners be able to make some decisions on their own? Which decisions will require the unanimous consent of all partners? What are the voting rights of each partner? How will tie votes be resolved?Circumstances under which new partners might be admitted into the partnership.Work hours and vacation.Kinds of outside business activities that will be allowed for partners.Disposition of partnership's name if a partner leaves.

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Every partner has a right to take part in the conduct and management of the firm's business.Every partner has a right to be consulted and express his opinion on any matter related to the firm.Every partner has a right to have access to inspect and copy any books of accounts and records of the firm.Every partner has the right to an equal share in the profits of the firm, unless otherwise agreed by the partners.Every partner has the right to receive interest on loans and advances made by him to the firm.

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Every partner has the right to be indemnified for the expenses incurred and losses sustained by him in the ordinary conduct of the firm's business.Every partner has a right to continue in the firm unless expelled in accordance with the terms of the partnership agreement.Every partner has a right to retire in accordance with the terms of the partnership agreement or with the consent of other partners.

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Every partner must act honestly in the discharge of his duties to the maximum advantage of all the partners.Every partner must act in a faithful manner towards each other.Every partner must act within the scope of the authority entrusted to him.Every partner is bound to share the losses of the firm equally unless otherwise agreed.Every partner must indemnify the firm against losses sustained due to his willful negligence in the ordinary course of business.

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No partner can transfer or assign his interest in the firm to others without the consent of others partners.Every partner must maintain true and correct accounts relating to the firm's business.No partner must engage himself in a business in competition with the firm; otherwise he will be liable for any loss suffered by the firm. He will have to surrender private profits to the firm.Every partner should use the firm's property only for the firm's business and interest.

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No partner should make secret profits by way of commission or otherwise from the firm's business. He is liable to account for and pay to the firm any private profit from the transactions of the firm or from the use of its property or goodwill.Every partner is liable jointly with all the other partners and also severally for all the debts of the firm. The liability of a partner to third parties is unlimited

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Subject to the contract between the partners (SEC 16) If a partner derives profit for himself from any transaction of the firm or from the use of the property or business connection of the firm or the firm name, he shall account for that profit and pay it to the firm.If a partner carries or any business of the same nature as a competing with that of the firm he shall account for and pay to the firm all profit made by him in that business.

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Under partnership act 1932 the authority of partner to bind the firm by his act is called his implied authority. It is not given by agreement but is implied by law.

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A partner can do following act under implied authority. (Sec. 19 (1) ) He can sell the goods of the firm but he cannot sell the immovable property of the firm without the consent of other partners.He can purchase goods for the firm on credit if it is necessary for the carrying on the business.He can accept payments on the behalf of the firm and issue receipt for them. He can issue and accept cheques or other negotiable instruments on behalf of the firm.He can defend any suit filed against the firm.He can raise loans by mortgaging the property of the firm.He can employ staff for the conduct of the business of the firm.He can settle accounts with persons dealing with the firm.

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A partner cannot do the following act under implied authority unless there is usage or custom of trade. (Sec. 19 (2) )To submit a dispute relating to the business of the firm for settlement.To open a bank account on behalf of the firm in his own name.To compromise any claim of the firm.To withdraw any suit filed by the firm.To admit any liability in a suit against the firm.To acquire any immovable property of the firm.To transfer immovable property of the firm.To make an agreement with others on behalf of the firm.

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Legally binding partnership that may arise where, in fact, no formal partnership agreement is in effect. A person who by conduct or words represents, or allows him/herself to be represented, as a partner in a firm is liable for the credit or loans obtained by firm on the basis of such representation. Also called presumption of partnership.ORIf a person who is declare to be a partner (when actually he is not) does not deny the fact that he is a partner, he being held out as a partner is responsible for all liability of the business.

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A minor is a person who has not attained majority. In order to form a partnership there must be an agreement among the partners. The person who wants to enter in the partnership must have capacity to contract. As a minor has no capacity to contract, so he cannot become a partner. But with the consent of all the partners he may be admitted to the benefits of partnership by an agreement made by his guardian on his behalf, with other partners.

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He has a right to share in the property and profits of the firm.He is entitled to have access to inspect and take copies of the accounts of the firm. His agreed share in the property and profits of the firm is liable for the acts of the firm.He has no right while he continues to be a member to file a suit against the other partners. He can only do so, when he wants to break his connection with the firm.

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Within 6 months of his attaining majority, the minor must give public notice, as defined by sec. 72, notifying whether he has elected to become or not to become as partner. where the minor elects to become a partner (a) his rights and liabilities as between the partners continue the same till such date.If the minor elects not to become a partner, (a) his rights and liabilities, as between the partners, shall continue the same as before till the date of notice.

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A partnership firm is said to be reconstituted when any of the following changes occurs and the firm continues.

Introduction of a new partner Sec. 31Death of a partner Sec. 35Insolvency of a partner Sec. 34Transfer of partners interest Sec. 29Retirement of a partner Sec. 32Expulsion of a partner Sec. 33

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Cannot be made without consent of all partnersLiabilityFor acts done after he becomes partnerDepends on mutual agreementFirm dissolvedProperty not liable after deathNo public notice required

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Ceases to be partner from the date of declaration by courtFirm is dissolvedPartners property not liable for firm acts after adjudicationFirm not liable for acts of the insolvent after thisCan do so with all partners consentTransferee cannot become partnerCannot interfere in the business, require accounts & inspectEntitled to receive profits

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If he ceases to be partner but others continueIt happensWith the consent of allIn accordance with express agreementIn partnership at will, by giving noticeLiabilityFor all acts before his retirementContinues to be liable until public notice is givenRightsMay carry on competing businessCan claim 6% interest on share in propertyShare of profits

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Can be done if Power is given to partners by express contractExercised by majority of partnersExercised in absolute good faithIs in interest of the firmServed with noticeOpportunity of being heard is givenRights & Liabilities same as retiring partner

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A firm may be dissolved in the following manner:

Dissolution by Court

Dissolution by agreement

Dissolution by operation of law

Dissolution on the happening of certain contingencies

Dissolution by notice

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The court may dissolve a firm at the suit of any partners on any of the following grounds namely :Insanity of a Partner: that a partner has become of unsound mind. The insanity of a partner does not ipso facto dissolve the firm and the next friend or continuing partners has to file suit foe dissolution.Permanent Incapacity of a Partner: that a partner has become permanently incapable of performing his duties as partner.Conduct Affecting Prejudicially The Business: that a partner is guilty of conduct, which is likely to affect prejudicially the carrying on the business of the firm.

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Breach of Partnership Agreement: that a partner willfully or persistently commits breach of agreements relating to the management of the affairs of the firm or the conduct of it - s business or otherwise conducts himself in matters relating to the business, that it is not reasonably practical for the other partners to carry on the business with him.Transfer of Interest of a Partner : that a partner has in any way transferred the whole of his interest in the firm to a third party.Loss: that the business of the firm cannot be carried on save at a lossJust And Equitable : on any other ground that renders it just an equitable that the firm should be dissolved.

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A firm may be dissolved with the consent of all the partners or in accordance with the contract between the partners. The partnership agreement may contain a proviso that the firm will be dissolved on the happening of certain contingency.A firm is compulsorily dissolved on the following groundsInsolvency of partnersBy the happening of any event which makes it unlawful for the business of the firm to e carried on

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A firm stands dissolved on the happening of the any of the following contingencies:On expiry of partnership period, if constituted for a fixed period.On completion of the firms venture for which the firm was formed.On the death of a partner.On the adjudication of a partner as an insolvent

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Right of partners to have the business wound up (Section 47).Right to have the debts of the firm settled out of the property of the firm (Section 49).To account for personal profits after dissolution [Section 16(a) and Section 50].Right to return of premium on premature dissolution (Section 51)Right where partnership contract is rescinded for fraud or misrepresentation (Section 52)Right to restrain from use of firm name or firm property (Section 53)

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(i) Liability for acts of partners done after dissolution Until public notice of dissolution of the firm is given, partners continue to be liable to third parties for any act done by any of them. However this liability does not apply to a partner who is dead or who is adjudged as insolvent or a sleeping partner.(ii) Continuing authority of partners for purpose of winding up After dissolution of a firm, the authority of each partner to bind the firm and the other mutual rights and obligations of the partners continue, so far as may be necessary (a) to wind up the affairs of the firm and(b) To complete transactions began but unfinished, at the time of the dissolution.(iii) Liability to share profits earned after dissolution If any partner earns any profit from any transaction connected with the firm, after the dissolution, he must share it with the other partners and the legal representative of any deceased partner.

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If you have any query you are more than welcome.

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