Partnership Act 1932 New Slides

7/23/2019 Partnership Act 1932 New Slides

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1932


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Content PG no.

INTRODUCTION 4

SALIENT FEATURES

5

HOW PARTNERSHIP REGISTERED

6PROCEDURE 7

HOW PARTNERSHIP FORMED

9

AGGREEMENT

10

ESSENTIALS RIGHTS AND DUTIES OF

PARTNERS 13

RIGHTS AND DUTIES


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Section-4 of a partnership as the relation betweenpersons who agreed to share profit of a business

carried on by all, or by any of them acting for all.

According to sir F.POLLOCK,A partnership is therelation which subsist between the persons who

have agreed to share the profits of a businesscarried on by all, or any of them on behalf of all ofthem.


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SALIENT FEATURES:-

To constitute a partnership. There must be a

contract at least two persons are required.

The partnership act does not lay down anymaximum number of partners.

According to section-11 of the company act ,a

partnership for a banking business must not

have more than ten partners.

For other business ,partners must not have

more than twenty partners.

There must be an agreement between theartners to share the rofit includin ne ative


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HOW PARTNERSHIP

REGISTERED:-A registered partnership firm

is one which is duly

registeredwith the registrar of

firms, in

ac accordance with the

procedure laid down undersection-58.


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PROCEDURE:-The following are the procedure forregistration of partnership firm:-

It must be registered, any time, with the registrar

of firm of the area where the business of the firm

is situated, or is proposed to be situated.

A detail statement must be sent to the registrar of

firms of the respective area on a form, prescribedfor the purpose along with the amount of the fee,

prescribed for registration.

The prescribe forms contains all details


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PROCEDURE:-

The statement must be sign by all the

partners personally, or by there agent on there

behalf, specially authorized for the purpose.

All such signature (i.e. of their agents),must

be verified as well.

Such statement may be sent by post or maybe delivered personally to the registrar of

firms concerned.


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AGREEMENT:-NAME OF THE BUSINESS:-Name of the

business should be specified with the

partners.TERM:-Business date should be specified

and shall start the business either it will

terminated.

CAPITAL:-The capital of the partnershipshall be contributed in cash by the

partners.

PROFIT AND LOSS:- The net profits of theartnershi shall be divided e uall between


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AGREEMENT:-SALARIES AND WITHDRAWLS:-Neither partner

shall receive any salary for services rendered to the

partnership. Each partner may, from time to time,

withdraw the credit balance in their income account.

DUTIES AND RESTRICTION:-The partners shall

have equal rights in the management of the

partnership business, and each partner shall devote

their entire time to the conduct of the business.

BANKING:-All funds of the partnership shall be

deposited in its name in such checking account or

accounts as shall be


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AGREEMENT:-BOOKS:-The partnership books shall be maintained at

the principal office of the partnership, and each partner

shall at all times have access thereto.

VOLUNTARY TERMINATION:-The partnership may be

dissolved at any time by agreement of the partners, in

which event the partners shall proceed with reasonable

promptness to liquidate the business of the partnership.

DEATH:-Upon the death of either partner, the surviving

partner shall have the right either to purchase the

interest of the decedent in the partnership or to

terminate and liquidate the partnership business.-


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ESSENTIALS:-ASSOCIATION OF TWO OR MORE PERSON

MUST EMERGE OUT OF AN AGREEMENT.

MINOR CANNOT BE MEMBER OFAPARTNERSHIP

PARTICULAR PARTNERSHIP

MUST BE TO CARRY ON SOME BUSINESS

MUST BE TO SHARE THE PROFIT OF THE

BUSINESS

ACTIVE PARTNERS AND SLEEPING PARTNERS

PARTNERS AS AGENT OR PRINCIPAL OFOTHER PARTNERS


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RIGHTS of a partner:-Right to take part in the conduct of the business ofthe firm.

Right to share equally the profit of the firm.

Right to express his opinion on any matter.Right to be the joint owner of the property of the firm.

Right to take in an emergency all such action as arereasonably necessary to protect the firm from anyloss.

Right not to be expelled.

Right to retire.

Right to carry on an competing business, but onlyafter retirement.

Right as an retiring partner to share subsequent


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DUTIES of a partner:- It is the duty of each partner to indemnify the firm

for the losses caused to it due to the fraud

committed by him during the conduct of the firms

business.

Partner is duty-bound not to carry on any

business other than the firms own business, so

long as he continues to be a partner of that firm, if

he is restrained by an agreement to this effectwith the other partners.

It is the partners duty to indemnify the firm for

any losses suffered by it, due to his willful

negligence in the conduct of the firms business.


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DUTIES of a partner:- A partner is duty-bound to account for all the

profits that he makes, even secretly, from any

transaction of the firm, or from the use of any of the

properties of the firm, or the business connections

of the firm, or even by using the name of the firm.

In case a partner happens to carry on some

business that competes with the firms own

business, he will have to account for and pay to thefirm all the profits made by him in that competing

business.

A partner is duty-bound not to assign his own

share to some outside party, the partnership itself


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COMPANY VS

PARTNERSHIP:-Formation:A company is created by

registration under the Companies Act. A partnership

is created by agreement


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COMPANY VS

PARTNERSHIP:-NUMBER OF MEMBERS:A private company must

have at least two members and maximum 50

members. A partnership cannot consist of more than

20 persons (10 persons in case of banking

business).

MANAGEMENT:Members of a company are not

entitled to take part in the management of the

company unless they become directors. Partners are

entitled to share in the management of the firm

unless the articles provide otherwise.

AGENCY:A member of a company is not an agent ofthe com an or that of other members . Each


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COMPANY VS

PARTNERSHIP:-LIABILITY OF MEMBERS:The liability of a member

of a company may be limited by shares or byguarantee. The liability of a partner is unlimited.

POWER: The company can only operate within the

objects laid down in the memorandum of

association, though these can be altered to some

extent by special resolution. Partners may carry on

any business as they please so long as it is not

illegal and make whatever arrangements they wish

with regard to the running of the firm from time to

time.

TERMINATION: No one member of a com an can


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SHARING OF PROFIT:-The partners must come together to share profits.Thus, if one member gets only fixed remuneration

(irrespective of profits) or one who gets only interest

and no profit share at all, is not a partner. - -

Similarly, sharing of receipts or collections (without

any relation to profits earned) is not sharing of profit

and the association is not partnership. For example,

agreement to share rents collected or percentage oftickets sold is not partnership, as sharing of profits

is not involved. - - The share need not be in

proportion to funds contributed by each partner. - -

Interestingly, though sharing of profit is essential,


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ACCOUNTING TREATMENT:-

No salary or commission is payable to the partner for

participating in the business.

Sharing profits and losses equally, unless mention

in the deed.

No interest is payable on capital, unless mention in

the deed. It is only payable on profit.

Interest on loan given by partners at 6%p.a. unlessmention in the deed. It is payable even if there is no

profits.

No interest is payable on drawings unless mention

in the deed.


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By mutual agreement;

By notice of dissolution;

By operation of law;

By the happening of certain contingencies;

By a decree of the court

DISSOLUTION OF

PARTNERSHIP FIRM:-


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Documents

Partnership Act 1932 New Slides