The Indian Partnership Act. A partnership is the relationship between persons who have agreed to share the profits of a business carried on by all or any of them acting or all. .
A partnership agreement can be entered into between persons who are competent to contract. Every person who is of the age of majority according to the law to which he is subject and who is of sound mind and is not disqualified from contracting by any law to which he is subject can enter into a partnership.
HINDU UNDIVIDED FAMILY
The number of partners in a firm shall not exceed 20 and a partnership having more than 20 persons is illegal.
If the partnership is between the karta or member of Hindu undivided family the members of the joint Hindu family will not be taken into account.
To indemnify for loss caused by fraud. Every partner shall indemnify the firm for loss caused to it by his fraud in the conduct of the business of the firm.
To share in the profits of the business. Every partner is entitled to share in the profits in proportion agreed to between the parties.
To be indemnified by the firm against losses or expenses incurred by him for the benefit of the firm.
The partners may by contract extend or restrict the implied authority of any partner.
Submit a dispute relating to the business of a firm to arbitration
Open a bank account in his own name
Withdraw a suit or proceeding on behalf of the firm
Admit any liability in a suit or proceeding against the firm
Transfer immovable property belonging to the firm, or
Enter into partnership on behalf of the firm.
Such minor may not sue the partners for an account or payment of his share of the property or profits of the firm
his rights and liabilities as a minor continue upto the date on which he becomes a partner, but he also becomes personally liable to third parties for all acts of the firm done since he was admitted to the benefits of the partnership, and
his rights and liabilities shall continue to be those of a minor upto the date on which he gives public notice,
his share shall not be liable for any acts of the firm done after the date of the notice, and
he shall be entitled to sue the partners for his share of the property and profits.
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.
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.
LOSS: that the business of the firm cannot be carried on save at a loss
JUST AND EQUITABLE : on any other ground that renders it just an equitable that the firm should be dissolved
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 grounds
Insolvency of partners
By the happening of any event which makes it unlawful for the business of the firm to e carried on.
Subject to contract between the partners a firm is dissolved on the happening of the following contingencies.
If constituted for a fixed term, by the expiry of that term
By the death of a partner
On insolvency of a partner
If the partnership is at will, the same may be dissolved by service of a notice by one partner to dissolve the firm.
the firm name
the names of any other places where the firm carries on business;
the date when each partner joined the firm;
the duration of the firm.
A partnership deed should contain the following clauses
Name of the parties
Nature of business
Name of the firm
Share of partners in profits and losses
Banking, Account firm
Books of account
Retirement and expulsion of partners
Death of partner
Dissolution of firm
Settlement of disputes