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PARTNER:
One who partakes or shares with another
An associate
One who has a share with another or others in some
commercial, manufacturing or other undertaking
One who dances with another.
An associate in a firm. A member of a firm or
partnership.
PARTNERSHIP
PARTNERSHIP:
The state or condition of being a partner
The association of two or more persons for the purpose of
undertaking and prosecuting conjointly any business,
occupation, or calling
That which subsists between persons who have agreed to
combine their property, labour skill in some business and to
share the profits thereof between them
A type of business entity in which partners share with each the
profits or losses of the business.
FIRM:
Persons who enter into partnership are collectively called a
firm
PARTNERSHIP²Contd.
SCHEME OF LAW:
Divided into 8 Chapters
Sections 74
Schedule 1
CHAPTERS:
1. Preliminary
2. The Nature of Partnership
3. Relations of Partners to One Another
4. Relations of Partners to Third Parties
PARTNERSHIP ACT²Contd.
SCHEDULE:
Fees Prescribed
DEFINITIONS
ë
Binds every one of the partners
An act in which every one of them had actually
participated
Gives rise to a right enforceable by or against the firm
DEFINITIONS²Contd.
µBUSINESS¶:
Includes every trade, occupation and profession.
and not
An
and not
definition
General and vague
Broadly, any activity which, if successful, would
result in profit
Must be in existence
May be temporary or permanent (indefinite)
DEFINITIONS²Contd.
PARTNERSHIP:
!
Persons who have entered into partnership with
one another are individually called µpartners¶ and
collectively a µfirm¶ and the name under which their
business is carried on is called the µfirm name¶
A voluntary act between two or more persons.
PARTNERSHIP---Contd.
ESSENTIALS:
Association of two or more persons to carry on a
business
An agreement entered into by all concerned
Agreement must share the profits
Business must be carried on.
Carried on by all or any of the persons concerned
acting for all.
PARTNERSHIP--- Contd.
!
#
Entered into by all persons concerned
Partnership arises only as a result of an agreement,
express or implied
Created by a contract, it does not arise by operation of
law e.g. joint operation (heirs on death )
Voluntary contractual
Lawful agreement; founded on good faith, for lawful
object between competent persons. Fulfill all the
essentials of a valid contract.
Can even come into being upon an oral agreement
ESSENTIALS OF PARTNERSHIP²Contd.
$#
Must be an agreement to share profits arising out of
the business
An essential element of partnership agreement
Different from clubs, societies, charitable
associations etc
How to be shared left to the parties themselves
Sharing of losses not essential.
Profits refer to net profits.
ESSENTIALS OF PARTNERSHIP---Contd.
%
#
µBusiness¶ as defined i.e. any trade, occupation or
profession.
May be temporary or permanent (indefinite).But must be
in existence.
Agreement to carry on business at a future time does not
result in present partnership.
Must be carried on by all or by any concerned acting for
all
Business must be lawful
Mutual agency
True test of partnership.
CARRYING ON BUSINESS²Contd.
WORKING PARTNER:
Not necessarily a partner in business
Maybe only an employee
Gets a share in the net profits
Remuneration for services rendered.
FIRM
!#
Persons who have collectively entered into
partnership with one another is collectively called a
firm
Name under which business is carried is Firm Name.
Business under any name or style
Taking care of rules like trade name, goodwill etc.
ILLEGAL PARTNERSHIP
CO-OWNERSHIP
Akin but different
Partnership result of an agreement
Mutual rights and obligations different
Consent of all trade/business: Examples
Transfer of interests
PARTNERSHIP---DISTINGUISHED
COMPANY:
1. Person---Legal
2. Creation± Legal formalities/agreement
3. Transfer of interest
4. Agents of others
5. Liability to debts
6. Contract
7. Private arrangements
8. Number
PARTNERSHIP DISTINGUISHED--Contd.
9.Death²Dissolution
10. Property
11. Restrictions
12. Sue and be sued
13. Decree
14.Registration
15. Shareholder
PARTNERSHIP & COMPANY²
DISTINGUISHED.
CLUB:
Entirely different
Club members not liable for acts of other members
Not liable to be creditor of club
Liability²extent of Club¶s regulations
No implied authority i.e. bind other members of the
club.
CONTD.
TRADE ASSOCIATION:
Mutual agency does not exist
PARTNERSHIP---EXISTENCE
HOW TO DETERMINE:
Real relation between the partners
Mainly a question of fact
Onus to prove on the appellant
PARTNERS²RELATIONS TO ONE ANOTHER
PROPERTY OF FIRM:
Inclusive definition
1. All property and rights
brought to the
stock of the firm
2. Acquired by purchase or otherwise during the
of the business
& 'of the business
4. Rights and interests acquired with money
belonging to the firm. Deemed.
PARTNERS²RELATIONS TO ONE ANOTHER--
-Contd.
GOODWILL:
Not defined
³The whole advantage, whatever it may be, of the
reputation and connection of the firm´
Intangible
Easy to describe, difficult to define
It is benefit and advantage of the good name,
reputation and connection of a business
GOODWILL---Contd.
No independent existence
Cannot subsist by itself
Attached to business
Attribute of a business, trade or profession.