Presentation on

Major Provisions in Relation to

Partnership Act, 1932

Presented by-
Kashish Gupta
Purva Sharma
Shikha Bansal
 Introduction
• The law of partnership is contained in the Indian Partnership Act,
1932, which came into force on 1st Oct., 1932.

• Partnership:- Section 4 of the Partnership Act defines

Partnership as “the relation between persons who have agreed to
share the profits of a business carried on by all or any of them acting
for all”.
• Partner, Firm & Firm name:- Persons who have entered into
partnership with one another are called individually "Partners" and
collectively "a Firm" and the name under which their business is
carried on is called the "Firm name."
 Registration of Firm
• Section 57 provides the state government has been empowered to
appoint registrar of firms defining the areas, for the exercise of their
powers and performing duties.
• As per the provision of section 58 it should include following
details:
• The name of the firm.
• The full names and permanent resident address of the partners.
• The time span of the firm.
• Business the date when each partner effuse to the firm.
• The principal place of business transaction of the firm.
• The names of any other places where the firm carries its functional
obligations.
 Incoming Partner (Sec. 31)
• Subject to contract between the partners, no person can be admitted
as a partner into a firm without the consent of all the existing
partners.

Liability of an Incoming partner:-

• A new partner becomes liable for the debts and acts of the firm only
from the date he is admitted as a partner.
• A new partner may, however, agree to be liable for debts existing
prior to his admission but such agreeing will not give to a prior
creditor the right of suing him.
• The creditors can make him liable if he had agreed with them,
expressly or impliedly, for being liable towards them for the past
debts.
 Outgoing Partners
1. Retirement of a Partner (Sec. 32):-
• A partner is said to retire when he ceases to be partner & the
surviving partners continue to carry on the business of the firm.
Method of Retirement:-
• particular partnership
• partnership at will
Liability of a Retiring Partner:-
• A retiring partner free from liability by giving public notice, for the
acts of the firm done before his retirement. however, by an
agreement with third parties and the partners of the reconstituted
firm discharging outgoing partner from all liabilities.
2.Expulsion of a Partner (Sec. 33):-
• A partner may be expelled from a firm by majority of the partners
after giving reasonable notice if, (a) the power to expel has been
conferred by contract, and (b) such a power has been exercised in
good faith for the benefit of the firm.
3.Insolvency of a Partner (Sec. 34):-
• Where a partner in a firm is declared as insolvent, he ceases to be a
partner
• insolvent partner is not liable for any act of the firm and the firm is
not liable for any act of the insolvent.
• The insolvent partner’s share in the firm’s assets will be used for
firm’s debts first and whatever remains will be utilised for the
insolvent partner’s personal debts.
4.Death of a Partner (Sec. 35):-
• on the death of a partner a firm is dissolved, but if the other partners
so agree the firm may not be dissolved [Sec. 42 (c)]. Where a firm is
not dissolved, the estate of a deceased partner is not liable for any
act of the firm done after his death.
 Dissolution of a Firm
• When the partnership between all the partners of a firm is dissolved,
then it is called dissolution of a firm.
• Modes of Dissolution of a Firm:-
1. Voluntary dissolution :-
I. By Agreement (Section 40)
II. Compulsory Dissolution (Section 41)
III. On the happening of certain contingencies (Section 42)
IV. By notice of partnership at will (Section 43)
2.Dissolution of a Firm by the Court:-
I. Insanity/Unsound mind
II. Permanent Incapacity
III. Misconduct
IV. Persistent Breach of the Agreement
V. Transfer of Interest
VI. Continuous/Perpetual losses
VII. Just and equitable grounds
Thank You