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.

THANK YOU