week 5 partnership law

8/3/2019 Week 5 Partnership Law

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Department of

Management

Sciences

By

Muhammad Naveed Chohan

Wednesday, May 02, 2012 1

CORPORATE LAW

Week 5Law of Partnership


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Introduction to Partnership

Kinds of Partners and Partnerships

Formation of Partnership

Dissolution of Partnership

Outline


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What is Partnership?

Partnership is the 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

[Sec. 4 of Partnership Act 1930]

Partnership is the relation existing between persons to make contracts who

agree to carry on a lawful business with a view to private gain

[Prof. Haney]



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Characteristics of Partnership:

Legal Entity

Agreement

Number of Partners

Existence of Business Sharing of Profits

Mutual Agency

Unlimited Liability

Capital

Utmost Good Faith Management

Control

Transfer of Interest

Duration



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Active Partner

Sleeping Partner

Nominal Partner

Senior Partner

Junior Partner

Partner in Profits Only

Secret Partner

Minor Partner

Kinds of Partners


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Minor Partner

a. Position During Minority Right to receive agreed share

Right to inspect and take copies of the accounts

No personally liable for debts

Can not take part in management

Right to sue other partners for profits

Can not be declared insolvent

b. Position after Majority

Decision should be within six months after attaining majority

Public Notice

b. Decision to Become a Partner

c. Decision not to Become a Partner

Kinds of Partners


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General Partnership Liability of all the partners is unlimited

Creditors can recover their dues even from personal property of all the partners

Every partner has equal right to take part in the management of the firm

1. Partnership at will:(Sec.7 of Partnership Act 1932)

If no provision is made in the agreement regarding the duration of the partnership, it is

called partnership at will

General Partnership treated as partnership at-will: Partnership is for Unlimited period, for

limited period but continued.

2. Particular Partnership: Limited Partnership

Types of Partnerships



Limited Partnership Under Partnership Act 1907 of England

One or more partners have limited liability and at least one has unlimited liability

Characteristics of the Limited Partnership:

One or more partners have limited liability At least one has unlimited liability

Formation under Partnership Act 1907 of England

Must be registered

Limited partner cannot take part in management

No return of capital until he remains in partnership

Can inspect accounts

Can give suggestions and recommendations

New partner can be admitted

Minimum 20 persons10 for banking business

Types of Partnerships



Important Points before Formation of Partnership

Selection of partners with care

Object should be lawful

Discussion of rights and duties with care

Registration of firm



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Formation of Partnership Deed

Registration of Partnership

STEP 1

STEP 2

Submissionof

Application

Certification

U/S 59

Change ofParticulars

Penalty for

FalseParticulars


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End of Week #5 Lecture Presentation

Thanks for Patience

week 5 partnership law

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