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    Nature of Partnership

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    Tiger Khan
    The document discusses the key elements of a partnership under Indian law: 1. There must be an agreement between two or more persons to form a partnership. The partnership act only applies to agreements entered into after 1932. 2. The agreement must be to share the profits of a business. Carrying on a joint family business or music club is not a partnership unless there is an intention to earn profits. 3. The business must be carried on by all or any of the partners acting for all. This mutual agency is a key feature, with each partner able to bind the others through their actions related to the business.

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    Nature of Partnership

    Uploaded by

    Tiger Khan
    189 views2 pages
    The document discusses the key elements of a partnership under Indian law: 1. There must be an agreement between two or more persons to form a partnership. The partnership act only applies to agreements entered into after 1932. 2. The agreement must be to share the profits of a business. Carrying on a joint family business or music club is not a partnership unless there is an intention to earn profits. 3. The business must be carried on by all or any of the partners acting for all. This mutual agency is a key feature, with each partner able to bind the others through their actions related to the business.

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    Partnership

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    The document discusses the key elements of a partnership under Indian law: 1. There must be an agreement between two or more persons to form a partnership. The partnership act only applies to agreements entered into after 1932. 2. The agreement must be to share the profits of a business. Carrying on a joint family business or music club is not a partnership unless there is an intention to earn profits. 3. The business must be carried on by all or any of the partners acting for all. This mutual agency is a key feature, with each partner able to bind the others through their actions related to the business.

    Copyright:

    © All Rights Reserved
    Download as DOC, PDF, TXT or read online from Scribd
    Download as doc, pdf, or txt
    189 views2 pages

    Nature of Partnership

    Uploaded by

    Tiger Khan
    The document discusses the key elements of a partnership under Indian law: 1. There must be an agreement between two or more persons to form a partnership. The partnership act only applies to agreements entered into after 1932. 2. The agreement must be to share the profits of a business. Carrying on a joint family business or music club is not a partnership unless there is an intention to earn profits. 3. The business must be carried on by all or any of the partners acting for all. This mutual agency is a key feature, with each partner able to bind the others through their actions related to the business.

    Copyright:

    © All Rights Reserved
    Download as DOC, PDF, TXT or read online from Scribd
    Download as doc, pdf, or txt
    of 2

    Nature of Partnership:

    Application
    The Indian prater ship Act of 1932 applies to partnership created by agreement
    between parties The act is not retrospecti!e" it does not a#ect any right$ title
    interest$ obligation or a liability ac%uired or incurred before the act came into
    operation in 1932 &'ec ()* the act is not e+hausti!e It does not apply to ,oint -indu
    family farms
    The essential elements of a
    partnership:
    Defnition and Characteristics:
    'ection ) of the partnership act de.nes a partnership as follows: /Partnership is the
    relation between persons who ha!e agreed to share the pro.ts of a business carried
    on by all or any of them acting for all0 A partnership$ as de.ned in the act$ must
    ha!e three essential elements:
    1 There must be an agreement entered into by two or more persons
    2 The agreement must be to share the pro.ts of a business
    3 The business must be carried on by all or any of them acting for all
    112oluntary agreement
    The .rst element shows the !oluntary contractual nature of partnership A
    partnership can only arise as a result of an agreement$ e+press or implied$ between
    two or more persons 3here there is no agreement there is no partnership 4ut a
    partnership cannot be formed with more than 11 persons in 4an5ing and 21 persons
    in other types of business A partnership with persons e+ceeding the abo!e limits
    must be register under a company act
    Partnership is not created by status: section 6 states that$ /the relation of
    partnership arises from contract and not from status0 In particular the
    members of a -indu undi!ided family caring on a family business$ as such$
    are not partners in such business
    7+ample: the sole proprietor of a business dies li!ing a number of heirs The
    heirs inherit the stoc5 in trade of the business including the goodwill of the
    business but do not become partners until there in an agreement$ e+press or
    implied to carry on the business as partners
    2 1 sharing of Pro.ts of a 4usiness:
    The second element states the moti!e underline the information of a partnership It
    also lays down that the e+istence of a business is essential to a partnership
    4usiness includes any trade$ occupation or profession If two or more persons ,oin
    together to form a music club it is not a partnership because there is no business in
    this case 4ut if two or more persons ,oin together to gi!e musical performances to
    the public with a !iew to earning pro.t$ there is a business and a partnership is
    formed
    318utual Agency:
    The third element is the most important feature of partnership It states that
    persons carrying on business in partnership are agents as well as principals The
    business of a .rm is carried on by all or anyone or more of them on behalf of all
    7!ery partner has the authority to act on behalf of all and can$ by his actions$ bind
    all the partners of the .rm$ each partner is the agent of the others in all matters
    connected with the business of the partnership The law of partnership has
    therefore been called a branch of the law agency

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