Category: Indian Partnership Act 1932

Section 14 Indian Partnership Act 1932

Section 14 Indian Partnership Act

Section 14 of the Indian Partnership Act 1932 is about The property of the firm. It is under CHAPTER III (RELATIONS OF PARTNERS TO ONE ANOTHER) of the Act.

The property of the firm

Subject to contract between the partners, the property of the firm includes all property and rights and interests in property originally brought into the stock of the firm, or acquired, by purchase or otherwise, by or for the firm, or for the purposes and in the course of the business of the firm, and includes also the goodwill of the business.

Unless the contrary intention appears, property and rights and interests in property acquired with money belonging to the firm are deemed to have been acquired for the firm.

Section 13 Indian Partnership Act 1932

Section 13 Indian Partnership Act

Section 13 of the Indian Partnership Act 1932 is about Mutual rights and liabilities. It is under CHAPTER III (RELATIONS OF PARTNERS TO ONE ANOTHER) of the Act.

Mutual rights and liabilities

Subject to contract between the partners–

(a) a partner is not entitled to receive remuneration for taking part in the conduct of the business;

(b) the partners are entitled to share equally in the profits earned, and shall contribute equally to the losses sustained by the firm;

(c) where a partner is entitled to interest on the capital subscribed by him such interest shall be payable only out of profits;

(d) a partner making, for the purposes of the business, any payment or advance beyond the amount of capital he has agreed to subscribe, is entitled to interest thereon at the rate of six per cent. per annum;

(e) the firm shall indemnify a partner in respect of payments made and liabilities incurred by him–

(i) in the ordinary and proper conduct of the business, and

(ii) in doing such act, in an emergency, for the purpose of protecting the firm from loss, as would be done by a person of ordinary prudence, in his own case, under similar circumstances; and

(f) a partner shall indemnify the firm for any loss caused to it by his wilful neglect in the conduct of the business of the firm.

Section 12 Indian Partnership Act 1932

Section 12 Indian Partnership Act

Section 12 of the Indian Partnership Act 1932 is about The conduct of the business. It is under CHAPTER III (RELATIONS OF PARTNERS TO ONE ANOTHER) of the Act.

The conduct of the business

Subject to contract between the partners–

(a) every partner has a right to take part in the conduct of the business;

(b) every partner is bound to attend diligently to his duties in the conduct of the business;

(c) any difference arising as to ordinary matters connected with the business may be decided by a majority of the partners, and every partner shall have the right to express his opinion before the matter is decided, but no change may be made in the nature of the business without the consent of all the partners; and

(d) every partner has a right to have access to and to inspect and copy any of the books of the firm.

Section 11 Indian Partnership Act 1932

Section 11 Indian Partnership Act

Section 11 of the Indian Partnership Act 1932 is about  Determination of rights and duties of partners by contract between the partners. It is under CHAPTER III (RELATIONS OF PARTNERS TO ONE ANOTHER) of the Act.

 Determination of rights and duties of partners by contract between the partners.

(1) Subject to the provisions of this Act, the mutual rights and duties of the partners of a firm may be determined by contract between the partners, and such contract may be expressed or may be implied by a course of dealing.

Such contract may be varied by consent of all the partners, and such consent may be expressed or may be implied by a course of dealing.

(2) Notwithstanding anything contained in section 27 of the Indian Contract Act, 1872 (9 of 1872), such contracts may provide that a partner shall not carry on any business other than that of the firm while he is a partner.

Section 10 Indian Partnership Act 1932

Section 10 Indian Partnership Act

Section 10 of the Indian Partnership Act 1932 is about Duty to indemnify for loss caused by fraud. It is under CHAPTER III (RELATIONS OF PARTNERS TO ONE ANOTHER) of the Act.

Duty to indemnify for loss caused by fraud

Every partner shall indemnify the firm for any loss caused to it by his fraud in the conduct of the business of the firm.

Section 9 Indian Partnership Act 1932

Section 9 Indian Partnership Act

Section 9 of the Indian Partnership Act 1932 is about General duties of partners. It is under CHAPTER III (RELATIONS OF PARTNERS TO ONE ANOTHER) of the Act.

General duties of partners

Partners are bound to carry on the business of the firm to the greatest common advantage, to be just and faithful to each other, and to render true accounts and full information of all things affecting the firm to any partner or his legal representative.

Section 7 Indian Partnership Act 1932

Section 7 Indian Partnership Act

Section 7 of the Indian Partnership Act 1932 is about Partnership at will. It is under CHAPTER II (THE NATURE OF PARTNERSHIP) of the Act.

Partnership at will

Where no provision is made by contract between the partners for the duration of their partnership or for the determination of their partnership, the partnership is “partnership at will”.

Section 6 Indian Partnership Act 1932

Section 6 Indian Partnership Act

Section 6 of the Indian Partnership Act 1932 is about Mode of determining existence of partnership. It is under CHAPTER II (THE NATURE OF PARTNERSHIP) of the Act.

Mode of determining existence of partnership.

In determining whether a group of persons is or is not a firm, or whether a person is or is not a partner in a firm, regard shall be had to the real relation between the parties, as shown by all relevant facts taken together.

Explanation 1.–The sharing of profits or of gross returns arising from property by persons holding a joint or common interest in that property does not of itself make such persons partners.

Explanation 2.–The receipt by a person of a share of the profits of a business, or of a payment contingent upon the earning of profits or varying with the profits earned by a business, does not of itself make him a partner with the persons carrying on the business;

and, in particular, the receipt of such share or payment–

(a) by a lender of money to persons engaged or about to engage in any business,

(b) by a servant or agent as remuneration,

(c) by the widow or child of a deceased partner, as annuity, or

(d) by a previous owner or part owner of the business, as consideration for the sale of the goodwill or share thereof,

does not of itself make the receiver a partner with the persons carrying on the business.

Section 5 Indian Partnership Act 1932

Section 5 Indian Partnership Act

Section 5 of the Indian Partnership Act 1932 is about Partnership not created by status. It is under CHAPTER II (THE NATURE OF PARTNERSHIP) of the Act.

  Partnership not created by status.

The relation of partnership arises from contract and not from status;

and, in particular, the members of a Hindu undivided family carrying on a family business as such, or a Burmese Buddhist husband and wife carrying on business as such are not partners in such business.