2. Partnership in India is governed by
The Partnership Act, 1932 which
had come into force on Oct 1,1932.
3. REGISTRATION OF FIRMS:
• Registration of a firm requires the following
formalities to be fulfilled:
1. The name and the address of the firm,
2. The principle place of business of the firm,
3. Name of the other places (if any) where the
firm carries the business.
4. cont…..,
4. The date on which each partner joined the
firm.
5. The name and the address of each partner.
6. The duration of the firm.
5. EFFECT OF NON-REGISTRATION:
Non-registration of firm has the following
effects.
1. A partner cannot bring a suit to enforce any
right.
2. An unregistered firm cannot file a suit.
3. An unregistered firm is not an illegal
association.
6. DEFINITION OF PARTNERSHIP:
• Sec.4 of the Partnership Act 1932 defines
partnership as, “The relation b/w persons
who have agreed to share the profits of a
business carried on by all or any of them
acting for all.”
7. NATURE OF PARTNERSHIP:
• Following are some good deals about
partnership:
An association of two or more persons.
An agreement or a contract.
It leads to business.
It can be carried on by all or any one of them.
It is formed for sharing profits.
8. POSITION & RIGHTS OF A MINOR
(SEC.13)
• A minor cannot become a partner in the firm.
• A minor can be admitted to the benefits of the
firm.
• A minor can inspect the books of accounts.
• A minor is entitled to his agreed share of
profit.
9. Cont….,
• He will not be personally liable to the debts of
the firm.
• After attaining majority, he may become a fullfledged partner of the firm.
• A minor who, thus becomes a partner will
become personally liable for all the debts &
obligations of the firm.
10. ESSENTIALS OF PARTNERSHIP:
• Any business is considered as partnership only
if the following three essentials are present:
Agreement b/w two or more persons,
Agreement to share profit as well as loss.
Carried on by al or any one acting of them
acting for all.
11. TEST OF PARTNERSHIP:
• Creditor OR Partner
Just by lending monies to the firm a person
cannot become the partner of the firm
because he is only liable for the interest not
for the profit earned by the firm.
……
12. …….
• Partner OR Servant
By earning remuneration, a person
cannot become a partner in the firm.
• Share of Goodwill
If a person has helped in selling the
goodwill of the firm and receiving
incentive for the same, cannot be called
a partner in the firm.
13. DUTIES OF PARTNERS:
• Following are some fundamental duties of all
the partners:
To work for the greatest common advantage.
To be just and faithful.
To render true accounts.
To give full information.
To indemnify for fraud (sec.10).
…….
14. ……..
To indemnify for fraud (sec.10).
To indemnify for willful neglect (sec.23f).
To share losses (sec.13b).
To diligently attend the business (sec.12b &
13a)
To account for private profits (sec.16 & 60)
To act within authority.
To not to assign share (sec. 29(1&2)).4
To account for the property of firms (sec.15).
15. DIFFERENCE B/W COMPANY &
PARTNERSHIP:
PARTNERSHIP
• It is governed by the
partnership act 1932.
• The rights & liabilities of
partners are unlimited.
• The firm has no legal or
separate entity or rights.
COMPANY
• A company is governed by
the companies act 1956.
• The rights & liabilities of
shareholders restricts to the
proportion of their share.
• By registration, company
becomes a separate legal
entity.
16. PARTNERSHIP
COMPANY
• The firm cannot sue any
other firm.
• A company can sue the
other company like any
natural person.
• In case of company, the
rights & obligation are as
against the factious, whole,
the company not the
members composing it.
• In case of partnership, there
are rights & obligation as
against individual person.
