BUSINESS LAWThe Partnership Act, 1932

Meaning & Scope

A relation between persons who have agreed to share the profits of a business carried on by all or any one of them acting for all

No separate legal entity apart from its membersNumber of members – Minimum 2 & Maximum 20Partners working as agentsPartner’s liability

Kinds of Partners

Active or working partnerSleeping or dormant partnerPartner in profits onlyNominal partnerSecret partner

Rights of PartnersRights regarding managementRights regarding inspectionRight to share profitsRight to interest on capital contributed by himRight to interest on advances given to the firmRight to be indemnifiedRight to retire Right to act in emergency

Duties of Partners

Duties regarding management Duties regarding accountsDuty to provide informationDuty to indemnify the firmDuty to share lossIndividual & joint liability

Registration of a FirmOptionalProcedure

Application to the Registrar of Firms Name & place(s) of business Names, addresses & joining date of the partners Duration, if any Prescribed fee & signatures of the partners

Punishment for furnishing false information – 3 months imprisonment or fine or both

Dissolution of a FirmDissolution of partnership & firmModes of dissolution

By agreementBy insolvency of the partnersBy becoming the business unlawfulBy notice of dissolutionBy the court By the expiration of time periodBy completing the project for which it was formed