{"id":734,"date":"2019-04-15T19:56:05","date_gmt":"2019-04-15T19:56:05","guid":{"rendered":"https:\/\/commerceiets.com\/?p=734"},"modified":"2019-04-15T19:56:05","modified_gmt":"2019-04-15T19:56:05","slug":"partnership-business","status":"publish","type":"post","link":"https:\/\/commerceiets.com\/partnership-business\/","title":{"rendered":"PARTNERSHIP BUSINESS"},"content":{"rendered":"\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_69_1 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/commerceiets.com\/partnership-business\/#PARTNERSHIP_BUSINESS\" title=\"PARTNERSHIP BUSINESS\">PARTNERSHIP BUSINESS<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/commerceiets.com\/partnership-business\/#ACCORDING_TO_SECTION_4_OF_INDIAN_PARTNERSHIP_ACT_1932\" title=\"ACCORDING TO SECTION 4 OF INDIAN PARTNERSHIP ACT, 1932\">ACCORDING TO SECTION 4 OF INDIAN PARTNERSHIP ACT, 1932<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/commerceiets.com\/partnership-business\/#ACCORDING_TO_ERIC_L_KOHLER\" title=\"ACCORDING TO ERIC L KOHLER\">ACCORDING TO ERIC L KOHLER<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/commerceiets.com\/partnership-business\/#ACCORDING_TO_PROF_LH_HANEY\" title=\"ACCORDING TO PROF. L.H. HANEY\">ACCORDING TO PROF. L.H. HANEY<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/commerceiets.com\/partnership-business\/#ACCORDING_TO_JOHN_A_SHUBIN\" title=\"ACCORDING TO JOHN A SHUBIN\">ACCORDING TO JOHN A SHUBIN<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/commerceiets.com\/partnership-business\/#ACCORDING_TO_WILLIAM_R_SPRIEGEL\" title=\"ACCORDING TO WILLIAM R SPRIEGEL\">ACCORDING TO WILLIAM R SPRIEGEL<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/commerceiets.com\/partnership-business\/#FEATURES_OF_PARTNERSHIP_BUSINESS\" title=\"FEATURES OF PARTNERSHIP BUSINESS\">FEATURES OF PARTNERSHIP BUSINESS<\/a><ul class='ez-toc-list-level-4' ><li class='ez-toc-heading-level-4'><ul class='ez-toc-list-level-4' ><li class='ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/commerceiets.com\/partnership-business\/#1_ASSOCIATION_OF_TWO_OR_MORE_PERSONS\" title=\"1. ASSOCIATION OF TWO OR MORE PERSONS\">1. ASSOCIATION OF TWO OR MORE PERSONS<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-9\" href=\"https:\/\/commerceiets.com\/partnership-business\/#2_AGREEMENT\" title=\"2. AGREEMENT\">2. AGREEMENT<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-10\" href=\"https:\/\/commerceiets.com\/partnership-business\/#3_EXISTENCE_OF_BUSINESS_AND_PROFIT_MOTIVE\" title=\"3. EXISTENCE OF BUSINESS AND PROFIT MOTIVE\">3. EXISTENCE OF BUSINESS AND PROFIT MOTIVE<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-11\" href=\"https:\/\/commerceiets.com\/partnership-business\/#4_SHARING_OF_PROFITS\" title=\"4. SHARING OF PROFITS\">4. SHARING OF PROFITS<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-12\" href=\"https:\/\/commerceiets.com\/partnership-business\/#5_RELATIONSHIP_OF_PRINCIPAL_AND_AN_AGENT\" title=\"5. RELATIONSHIP OF PRINCIPAL AND AN AGENT\">5. RELATIONSHIP OF PRINCIPAL AND AN AGENT<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-13\" href=\"https:\/\/commerceiets.com\/partnership-business\/#6_BUSINESS_BE_CARRIED_ON_BY_ALL_OR_ANY_ONE_OF_THEM_ACTING_FOR_ALL\" title=\"6. BUSINESS BE CARRIED ON BY ALL OR ANY ONE OF THEM ACTING FOR ALL\">6. BUSINESS BE CARRIED ON BY ALL OR ANY ONE OF THEM ACTING FOR ALL<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-14\" href=\"https:\/\/commerceiets.com\/partnership-business\/#7_UNLIMITED_LIABILITY\" title=\"7. UNLIMITED LIABILITY\">7. UNLIMITED LIABILITY<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-15\" href=\"https:\/\/commerceiets.com\/partnership-business\/#8_RESTRICTION_ON_TRANSFER_OF_INTEREST\" title=\"8. RESTRICTION ON TRANSFER OF INTEREST\">8. RESTRICTION ON TRANSFER OF INTEREST<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-16\" href=\"https:\/\/commerceiets.com\/partnership-business\/#9_COLLECTIVE_MANAGEMENT\" title=\"9. COLLECTIVE MANAGEMENT\">9. COLLECTIVE MANAGEMENT<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-17\" href=\"https:\/\/commerceiets.com\/partnership-business\/#10_GOVERNING_ACT\" title=\"10. GOVERNING ACT\">10. GOVERNING ACT<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-18\" href=\"https:\/\/commerceiets.com\/partnership-business\/#11_REGISTRATION\" title=\"11. REGISTRATION\">11. REGISTRATION<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-19\" href=\"https:\/\/commerceiets.com\/partnership-business\/#12_UTMOST_GOOD_FAITH\" title=\"12. UTMOST GOOD FAITH\">12. UTMOST GOOD FAITH<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-20\" href=\"https:\/\/commerceiets.com\/partnership-business\/#13_CAPITAL_CONTRIBUTION\" title=\"13. CAPITAL CONTRIBUTION\">13. CAPITAL CONTRIBUTION<\/a><\/li><\/ul><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-21\" href=\"https:\/\/commerceiets.com\/partnership-business\/#RIGHTS_OF_THE_PARTNERS\" title=\"RIGHTS OF THE PARTNERS\">RIGHTS OF THE PARTNERS<\/a><ul class='ez-toc-list-level-4' ><li class='ez-toc-heading-level-4'><ul class='ez-toc-list-level-4' ><li class='ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-22\" href=\"https:\/\/commerceiets.com\/partnership-business\/#1_RIGHT_TO_TAKE_PART_IN_THE_CONDUCT_OF_THE_BUSINESS\" title=\"1. RIGHT TO TAKE PART IN THE CONDUCT OF THE BUSINESS\">1. RIGHT TO TAKE PART IN THE CONDUCT OF THE BUSINESS<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-23\" href=\"https:\/\/commerceiets.com\/partnership-business\/#2_RIGHT_TO_BE_CONSULTED\" title=\"2. RIGHT TO BE CONSULTED\">2. RIGHT TO BE CONSULTED<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-24\" href=\"https:\/\/commerceiets.com\/partnership-business\/#3_RIGHT_TO_HAVE_ACCESS_TO_BOOKS\" title=\"3. RIGHT TO HAVE ACCESS TO BOOKS\">3. RIGHT TO HAVE ACCESS TO BOOKS<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-25\" href=\"https:\/\/commerceiets.com\/partnership-business\/#4_RIGHT_TO_SHARE_PROFITS\" title=\"4. RIGHT TO SHARE PROFITS\">4. RIGHT TO SHARE PROFITS<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-26\" href=\"https:\/\/commerceiets.com\/partnership-business\/#5_RIGHT_TO_INTEREST_ON_CAPITAL\" title=\"5. RIGHT TO INTEREST ON CAPITAL\">5. RIGHT TO INTEREST ON CAPITAL<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-27\" href=\"https:\/\/commerceiets.com\/partnership-business\/#6_RIGHT_TO_INTEREST_ON_ADVANCE\" title=\"6. RIGHT TO INTEREST ON ADVANCE\">6. RIGHT TO INTEREST ON ADVANCE<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-28\" href=\"https:\/\/commerceiets.com\/partnership-business\/#7_RIGHT_OT_BE_INDEMNIFIED\" title=\"7. RIGHT OT BE INDEMNIFIED\">7. RIGHT OT BE INDEMNIFIED<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-29\" href=\"https:\/\/commerceiets.com\/partnership-business\/#8_RIGHT_TO_THE_USE_OF_THE_PARTNERSHIP_PROPERTY\" title=\"8. RIGHT TO THE USE OF THE PARTNERSHIP PROPERTY\">8. RIGHT TO THE USE OF THE PARTNERSHIP PROPERTY<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-30\" href=\"https:\/\/commerceiets.com\/partnership-business\/#9_POWER_IN_AN_EMERGENCY\" title=\"9. POWER IN AN EMERGENCY\">9. POWER IN AN EMERGENCY<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-31\" href=\"https:\/\/commerceiets.com\/partnership-business\/#10_NO_NEW_PARTNER_TO_BE_INTRODUCED\" title=\"10. NO NEW PARTNER TO BE INTRODUCED\">10. NO NEW PARTNER TO BE INTRODUCED<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-32\" href=\"https:\/\/commerceiets.com\/partnership-business\/#11_NO_LIABILITY_BEFORE_JOINING_THE_FIRM\" title=\"11. NO LIABILITY BEFORE JOINING THE FIRM\">11. NO LIABILITY BEFORE JOINING THE FIRM<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-33\" href=\"https:\/\/commerceiets.com\/partnership-business\/#12_RIGHT_TO_RETIRE\" title=\"12. RIGHT TO RETIRE\">12. RIGHT TO RETIRE<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-34\" href=\"https:\/\/commerceiets.com\/partnership-business\/#13_RIGHT_NOT_TO_BE_EXPELLED\" title=\"13. RIGHT NOT TO BE EXPELLED\">13. RIGHT NOT TO BE EXPELLED<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-35\" href=\"https:\/\/commerceiets.com\/partnership-business\/#14_RIGHT_TO_CARRY_ON_COMPETING_BUSINESS\" title=\"14. RIGHT TO CARRY ON COMPETING BUSINESS\">14. RIGHT TO CARRY ON COMPETING BUSINESS<\/a><\/li><\/ul><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-36\" href=\"https:\/\/commerceiets.com\/partnership-business\/#DUTIES_OF_PARTNERS_IN_PARTNERSHIP_BUSINESS\" title=\"DUTIES OF PARTNERS IN PARTNERSHIP BUSINESS\">DUTIES OF PARTNERS IN PARTNERSHIP BUSINESS<\/a><ul class='ez-toc-list-level-4' ><li class='ez-toc-heading-level-4'><ul class='ez-toc-list-level-4' ><li class='ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-37\" href=\"https:\/\/commerceiets.com\/partnership-business\/#1_LOYALTY_AND_GOOD_FAITH\" title=\"1. LOYALTY AND GOOD FAITH\">1. LOYALTY AND GOOD FAITH<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-38\" href=\"https:\/\/commerceiets.com\/partnership-business\/#2_OBEDIENCE\" title=\"2. OBEDIENCE\">2. OBEDIENCE<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-39\" href=\"https:\/\/commerceiets.com\/partnership-business\/#3_REASONABLE_CARE\" title=\"3. REASONABLE CARE\">3. REASONABLE CARE<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-40\" href=\"https:\/\/commerceiets.com\/partnership-business\/#4INFORMATION\" title=\"4.INFORMATION\">4.INFORMATION<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-41\" href=\"https:\/\/commerceiets.com\/partnership-business\/#5_MANAGEMENT\" title=\"5. MANAGEMENT\">5. MANAGEMENT<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-42\" href=\"https:\/\/commerceiets.com\/partnership-business\/#6_INSPECTION_OF_BOOKS\" title=\"6. INSPECTION OF BOOKS\">6. INSPECTION OF BOOKS<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-43\" href=\"https:\/\/commerceiets.com\/partnership-business\/#7_SHARE_OF_PROFITS\" title=\"7. SHARE OF PROFITS\">7. SHARE OF PROFITS<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-44\" href=\"https:\/\/commerceiets.com\/partnership-business\/#8_COMPENSATION\" title=\"8. COMPENSATION\">8. COMPENSATION<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-45\" href=\"https:\/\/commerceiets.com\/partnership-business\/#9_REPAYMENT_OF_LOANS\" title=\"9. REPAYMENT OF LOANS\">9. REPAYMENT OF LOANS<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-46\" href=\"https:\/\/commerceiets.com\/partnership-business\/#10_CONTRIBUTION_AND_INDEMNITY\" title=\"10. CONTRIBUTION AND INDEMNITY\">10. CONTRIBUTION AND INDEMNITY<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-47\" href=\"https:\/\/commerceiets.com\/partnership-business\/#11_DISTRIBUTION_OF_CAPITAL\" title=\"11. DISTRIBUTION OF CAPITAL\">11. DISTRIBUTION OF CAPITAL<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-48\" href=\"https:\/\/commerceiets.com\/partnership-business\/#12_NATURE_AND_EXTENT_OF_PARTNERS_LIABILITY\" title=\"12. NATURE AND EXTENT OF PARTNER&#8217;S LIABILITY\">12. NATURE AND EXTENT OF PARTNER&#8217;S LIABILITY<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-49\" href=\"https:\/\/commerceiets.com\/partnership-business\/#13_LIABILITY_FOR_BREACH_OF_DUTY\" title=\"13. LIABILITY FOR BREACH OF DUTY\">13. LIABILITY FOR BREACH OF DUTY<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-50\" href=\"https:\/\/commerceiets.com\/partnership-business\/#14_LIABILITY_OF_NEW_PARTNERS\" title=\"14. LIABILITY OF NEW PARTNERS\">14. LIABILITY OF NEW PARTNERS<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-51\" href=\"https:\/\/commerceiets.com\/partnership-business\/#15_EFFECT_OF_DISSOLUTION_ON_PARTNERS_LIABILITY\" title=\"15. EFFECT OF DISSOLUTION ON PARTNER&#8217;S LIABILITY\">15. EFFECT OF DISSOLUTION ON PARTNER&#8217;S LIABILITY<\/a><\/li><\/ul><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"PARTNERSHIP_BUSINESS\"><\/span>PARTNERSHIP BUSINESS<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p class=\"has-medium-font-size\">PARTNERSHIP BUSINESS is a business where two or more persons agree to carry on commercial activity to earn profits. From legal point of view, partnership firm is not a separate legal entity. In other words, it has no existence separate from its partners. It means that in case of bankruptcy of partnership firm, private estates of partners would be liable to meet the firm\u2019s debts.<\/p>\n\n\n\n<p class=\"has-medium-font-size\">The partners act both as an agent or principal of the firm. The\npersons who entered into a partnership with one another is collectively known\nas Partnership or individually known as Partners. The name of the partnership\nbusiness is known as Firm Name. &nbsp;The\npartnership business is governed under Indian Partnership Act, 1932.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"ACCORDING_TO_SECTION_4_OF_INDIAN_PARTNERSHIP_ACT_1932\"><\/span><strong>ACCORDING TO SECTION 4 OF INDIAN PARTNERSHIP ACT, 1932<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p class=\"has-medium-font-size\">\u201cPartnership is the relation between persons who have agreed\nto share the profits of the business carried on by all or any one of them\nacting for all\u201d.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"ACCORDING_TO_ERIC_L_KOHLER\"><\/span><strong>ACCORDING TO ERIC L KOHLER<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p class=\"has-medium-font-size\">\u201cA contractual relationship, based upon a written, oral or\nimplied agreement between two or more persons who combine their resources and\nactivities in a joint enterprise and share in varying degrees and by specific\nagreement in the management and in the profits or losses.\u201d<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"ACCORDING_TO_PROF_LH_HANEY\"><\/span>ACCORDING TO PROF. L.H. HANEY<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p class=\"has-medium-font-size\">\u201cPartnership is the relation existing between persons,\ncompetent to make contracts who have agreed to carry on a lawful business in\ncommon with a view to private gain.\u201d<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"ACCORDING_TO_JOHN_A_SHUBIN\"><\/span>ACCORDING TO JOHN A SHUBIN<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p class=\"has-medium-font-size\">\u201cTwo or more individuals may form a partnership by making a\nwritten or oral agreement that they will jointly assume full responsibility for\nthe conduct of the business.\u201d<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"ACCORDING_TO_WILLIAM_R_SPRIEGEL\"><\/span>ACCORDING TO WILLIAM R SPRIEGEL<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p class=\"has-medium-font-size\">\u201cPartnership has two or more members, each of whom is\nresponsible for the obligation of the partnership. Each of the partners may bind\nothers and the assets of the partners may be taken for the debts of\npartnership.\u201d <\/p>\n\n\n\n<p class=\"has-medium-font-size\">To conclude, partnership is a business carried on with a\nview to earn and distribute profits between the partners in the agreed ratio or\nequal otherwise.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" style=\"text-align:center\"><span class=\"ez-toc-section\" id=\"FEATURES_OF_PARTNERSHIP_BUSINESS\"><\/span><strong>FEATURES OF PARTNERSHIP BUSINESS<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p class=\"has-medium-font-size\">The features of partnership are as follows:<\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"1_ASSOCIATION_OF_TWO_OR_MORE_PERSONS\"><\/span><strong>1. ASSOCIATION OF TWO OR MORE PERSONS<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<p class=\"has-medium-font-size\">In the partnership, there must be plurality of persons i.e.\ntwo or more persons should enter into an agreement to commence a partnership\nfirm. A single person cannot be called as a firm. Partnership Act also states\nthe minimum number of members must be two but does not specify maximum number\nof partners. However Section 464 of Indian Companies Act (Amendment), 2013\nrestricts the maximum number of partners to 50.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"2_AGREEMENT\"><\/span><strong>2. AGREEMENT<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<p class=\"has-medium-font-size\">Partnership must be an outcome of the agreement, not an\noutcome of operation of law. Such an agreement can be either in oral or in\nwriting. The agreement forms the basis of mutual rights and duties of the\npartners.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"3_EXISTENCE_OF_BUSINESS_AND_PROFIT_MOTIVE\"><\/span><strong>3. EXISTENCE OF BUSINESS AND PROFIT MOTIVE<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<p class=\"has-medium-font-size\">Partnership can be formed for the purpose of carrying on\nsome business with the intention of earning profits and such business must be\nlegal. A joint ownership of some property by itself cannot be called a\npartnership.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"4_SHARING_OF_PROFITS\"><\/span><strong>4. SHARING OF PROFITS<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<p class=\"has-medium-font-size\">The agreement between the partners must be aimed at sharing\nthe profits of the business. If some persons join hands to run some charitable\nactivity, it will not be called partnership. Further, if a partner is deprived\nof his rights to share the profits of the business, he cannot be called a\npartner. But it is not necessary that all partners should share the losses\nalso. It may be agreed between the partners that one or more of them shall not\nbe liable for losses.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"5_RELATIONSHIP_OF_PRINCIPAL_AND_AN_AGENT\"><\/span><strong>5. RELATIONSHIP OF PRINCIPAL AND AN AGENT<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<p class=\"has-medium-font-size\">Each partner is an agent as well as a partner of the firm.\nAn agent, because he bind the other partners by his conduct or acts. He acts as\nprincipal because he himself can be bound by the acts or conduct of other\npartners.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"6_BUSINESS_BE_CARRIED_ON_BY_ALL_OR_ANY_ONE_OF_THEM_ACTING_FOR_ALL\"><\/span><strong>6. BUSINESS BE CARRIED ON BY ALL OR ANY ONE OF THEM ACTING FOR ALL<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<p class=\"has-medium-font-size\">It means that each partner can participate in the conduct of\nthe business and each partner is bound by the acts of other partners in respect\nto the business of the firm.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"7_UNLIMITED_LIABILITY\"><\/span><strong>7. UNLIMITED LIABILITY<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<p class=\"has-medium-font-size\">The liability of the partners in the partnership firm is\nunlimited. Each partner is liable jointly or severally for all the debts of the\nfirm. &nbsp;This means that the personal\nproperty of the partners is liable in case the capital of the firm falls\ninsufficient to meet the liabilities of the firm.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"8_RESTRICTION_ON_TRANSFER_OF_INTEREST\"><\/span><strong>8. RESTRICTION ON TRANSFER OF INTEREST<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<p class=\"has-medium-font-size\">Partnership is born out of an agreement. If a partner wants\nto transfer his interest to an outsider, he can do so only with the consent of\nthe all other partners.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"9_COLLECTIVE_MANAGEMENT\"><\/span><strong>9. COLLECTIVE MANAGEMENT<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<p class=\"has-medium-font-size\">In case of partnership firms, the ownership and is not\nseparate from the management. Each partner is an owner and also a part of\nmanagement. Each one is entitled to take part in the management of day-to-day\nbusiness of the firm. However, partners may give the right of management to any\none partner. In this case, the partner will act as an agent to the firm on\nbehalf of all the other partners.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"10_GOVERNING_ACT\"><\/span><strong>10. GOVERNING ACT<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<p class=\"has-medium-font-size\">The partnership business is governed under Indian\nPartnership Act, 1932. The section 4 of this act states:<\/p>\n\n\n\n<p class=\"has-medium-font-size\">\u201cPartnership is the relation between persons who have agreed\nto share the profits of the business carried on by all or any one of them\nacting for all\u201d.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"11_REGISTRATION\"><\/span><strong>11. REGISTRATION<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<p class=\"has-medium-font-size\">Registration of partnership firm is not compulsory. However\npartners if so decide they may get it registered with the \u2018Registrar\u2019 of the\nFirms. The registration of the partnership business gives the firm and partners\na right to sue others.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"12_UTMOST_GOOD_FAITH\"><\/span><strong>12. UTMOST GOOD FAITH<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<p class=\"has-medium-font-size\">Every partner has a duty to act honestly and render proper\naccounts to other partners. Mutual trust and faith is essential for the success\nof partnership.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"13_CAPITAL_CONTRIBUTION\"><\/span><strong>13. CAPITAL CONTRIBUTION<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<p class=\"has-medium-font-size\">The partners contribute to the capital of the firm. It is\nnot necessary to have capital in profit sharing ratio. A partner can be\nadmitted t the firm even without contribution of the capital. It is not essential\nthat all partners must contribute to the firm\u2019s capital.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" style=\"text-align:center\"><span class=\"ez-toc-section\" id=\"RIGHTS_OF_THE_PARTNERS\"><\/span><strong>RIGHTS OF THE PARTNERS<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<h4 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"1_RIGHT_TO_TAKE_PART_IN_THE_CONDUCT_OF_THE_BUSINESS\"><\/span><strong>1. RIGHT TO TAKE PART IN THE CONDUCT OF THE BUSINESS<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<p class=\"has-medium-font-size\">Section 12(a) of Indian Contract Act, 1932 stipulates that each partner in a business partnership have the right to take part in the business proceeding. But this right is subject to a contract to the contrary. However, this right may be waived by a partner himself.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"2_RIGHT_TO_BE_CONSULTED\"><\/span><strong>2. RIGHT TO BE CONSULTED<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<p class=\"has-medium-font-size\">In case of matters affecting the business, each partner\ncan has the right to be consulted. Further, every partner has the right to\nexpress his views in front of other partners also. Sometimes, difference of\nopinion arises among the partners. If it is over an ordinary matter, the same\nmay be settled by a majority of the partners, whereas if it is over a\nfundamental matter, it can be settled only with the consent of all the\npartners.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"3_RIGHT_TO_HAVE_ACCESS_TO_BOOKS\"><\/span><strong>3. RIGHT TO HAVE ACCESS TO BOOKS<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<p class=\"has-medium-font-size\">Every partner in a business partnership can access and\ninspect any of the books of the firm as per law. It can be exercised either by\nthe partner himself or by his authorized agent. The partners cannot object to\ninspection of books by the agent of a partner, unless they have a reasonable\nground for believing that the trade secrets might be leaked out.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"4_RIGHT_TO_SHARE_PROFITS\"><\/span><strong>4. RIGHT TO SHARE PROFITS<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<p class=\"has-medium-font-size\">Every partner is entitled to have equal share in the\nprofits of the firm. At the same time, the partners are equally liable to all\nthe losses sustained by the firm unless otherwise agreed upon as per the\npartnership agreement.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"5_RIGHT_TO_INTEREST_ON_CAPITAL\"><\/span><strong>5. RIGHT TO INTEREST ON CAPITAL<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<p class=\"has-medium-font-size\">Ordinarily, no interest is payable to the partners.\nHowever, if it is allowed by an express or implied agreement or by the custom\nof trade, a partner can charge interest on capital. In such a case also,\ninterest shall be paid only out of profits.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"6_RIGHT_TO_INTEREST_ON_ADVANCE\"><\/span><strong>6. RIGHT TO INTEREST ON ADVANCE<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<p class=\"has-medium-font-size\">A partner who contributes additional advance to the firm\napart from the amount of his capital for the purpose of business is entitled to\nget there on an interest at the rate of 6% per annum. It is payable out of the\nproperty of the firm as if it were an expense. Thus it is payable even if there\nare no profits.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"7_RIGHT_OT_BE_INDEMNIFIED\"><\/span><strong>7. RIGHT OT BE INDEMNIFIED<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<p class=\"has-medium-font-size\">The partner of a firm is entitled be indemnified by the\nfirm in the following circumstances:<\/p>\n\n\n\n<ul class=\"wp-block-list\"><li>Expenses incurred in the ordinary course of business, and<\/li><li>Expenses incurred in an emergency.<\/li><\/ul>\n\n\n\n<h4 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"8_RIGHT_TO_THE_USE_OF_THE_PARTNERSHIP_PROPERTY\"><\/span><strong>8. RIGHT TO THE USE OF THE PARTNERSHIP PROPERTY<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<p class=\"has-medium-font-size\">In the absence of any contract to the contrary, each\npartner is presumed to have an equal share in the property of the partnership\nand is entitled to have them held and used only for the purpose of the business.\nPartners should not use it as their own property.When at any point of time, a\npartner uses the property of the business firm to his own benefit either\ndirectly or indirectly, the profits thus earned are accountable to the firm.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"9_POWER_IN_AN_EMERGENCY\"><\/span><strong>9. POWER IN AN EMERGENCY<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<p class=\"has-medium-font-size\">As per the Indian Partnership Act, a partner is vested\nwith the powers to initiate action to safeguard the firm from loss.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"10_NO_NEW_PARTNER_TO_BE_INTRODUCED\"><\/span><strong>10. NO NEW PARTNER TO BE INTRODUCED<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<p class=\"has-medium-font-size\">New partners may not be introduced in a partnership without the consent of every individual partners. They have the right to object such admission unless there is an express contract allowing such introduction.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"11_NO_LIABILITY_BEFORE_JOINING_THE_FIRM\"><\/span><strong>11. NO LIABILITY BEFORE JOINING THE FIRM<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<p class=\"has-medium-font-size\">Unless there is a contract to the contrary, new partner\nwill not have any liability for any act of the firm done before he become a\npartner.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"12_RIGHT_TO_RETIRE\"><\/span><strong>12. RIGHT TO RETIRE<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<p class=\"has-medium-font-size\">Retirement from a partnership is a partner\u2019s right.\nPartner can retire from partnership in any of the following modes.<\/p>\n\n\n\n<ul class=\"wp-block-list\"><li>With the consent of all the partners, or<\/li><li>As per the agreement between the partners, or<\/li><li>In case of partnership- at-will, by giving prior notice to the other      partners regarding the intention of his retirement.<\/li><\/ul>\n\n\n\n<h4 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"13_RIGHT_NOT_TO_BE_EXPELLED\"><\/span><strong>13. RIGHT NOT TO BE EXPELLED<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<p class=\"has-medium-font-size\">Every partner has a right not to be expelled from the\nfirm unless there is a clause in the partnership agreement that give power to\nthe majority of the partners to expel him in good faith.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"14_RIGHT_TO_CARRY_ON_COMPETING_BUSINESS\"><\/span><strong>14. RIGHT TO CARRY ON COMPETING BUSINESS<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<p class=\"has-medium-font-size\">Outgoing partners cannot be restricted as they are not\nbound by the partnership agreement. They have the right to carry on a business\ncompeting with that of the firm. But he should not use the name of the firm or\nsolicit the firm\u2019s customers who were dealing with the firm. However, he may\nagree with the partners that he will not carry on any competing business.<\/p>\n\n\n\n<p class=\"has-medium-font-size\"><strong>15. RIGHT TO SHARE SUBSEQUENT PROFITS AFTER RETIREMENT<\/strong><\/p>\n\n\n\n<p class=\"has-medium-font-size\">Where a partner has died or ceased to be a partner, the\nsurviving or continuing partners may carry on the regular business with the\nfirm\u2019s property without any final settlement of accounts between them. In such\ncases, the outgoing partner or his estate then in the absence of a contract to\nthe contrary is entitled to<\/p>\n\n\n\n<ul class=\"wp-block-list\"><li>such share of the profits as is proportionate to his share in the property of the firm, or<\/li><li>interest at the rate of 6% per annum on the amount of his share in the property of the firm.<\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\" style=\"text-align:center\"><span class=\"ez-toc-section\" id=\"DUTIES_OF_PARTNERS_IN_PARTNERSHIP_BUSINESS\"><\/span>DUTIES OF PARTNERS IN PARTNERSHIP BUSINESS<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<h4 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"1_LOYALTY_AND_GOOD_FAITH\"><\/span><strong>1. LOYALTY AND GOOD FAITH<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<p class=\"has-medium-font-size\">Each partner must act in good faith towards the other partners and must not take any advantage over the other partners by misrepresentation or concealment.&nbsp; Each partner owes a duty of loyalty to the partnership, and this duty bars the making of any secret profit at the expense of the firm and bars the use of the firm\u2019s property for personal benefit.&nbsp; A partner cannot promote a competing business, and if he does so, he can be liable for any damages sustained by the partnership. <\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"2_OBEDIENCE\"><\/span><em><strong>2. <\/strong><\/em><strong>OBEDIENCE<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<p class=\"has-medium-font-size\">Partners must observe any limitations adopted by a majority of the partners with regard to the ordinary details of the partnership business.&nbsp; For example, if a majority of the partners operate a retail store and decide that no sales can be made on credit, a partner placed in charge of the store must obey this limitation.&nbsp; If a third person does not know of the limitation, the managing partner will have the power to make a binding sale on credit to such a person, but if the third person does not pay his bill, the partner who violated the limitation is liable for any loss caused by his disobedience to the limitation.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"3_REASONABLE_CARE\"><\/span><strong>3. REASONABLE CARE<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<p class=\"has-medium-font-size\">A partner must use reasonable care in transacting the partner\u00adship\u2019s business\nand is liable for any loss resulting from a failure to act with reasonable\ncare.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"4INFORMATION\"><\/span><strong>4.INFORMATION<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<p class=\"has-medium-font-size\">A partner has the duty to inform the partnership of all matters relevant to\nthe partnership.&nbsp; For example, if one partner is going to buy out the\ninterest of another partner, this must be revealed to the partnership.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"5_MANAGEMENT\"><\/span><strong>5. MANAGEMENT<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<p class=\"has-medium-font-size\">Each partner has the right to take an equal part in transacting the business of the partnership.&nbsp; It is irrelevant that one partner contributed more than another financially or that one contributed only services when the partnership was formed.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"6_INSPECTION_OF_BOOKS\"><\/span><strong>6. INSPECTION OF BOOKS<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<p class=\"has-medium-font-size\">All partners are equally entitled to inspect the books of the partnership.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"7_SHARE_OF_PROFITS\"><\/span><strong>7. SHARE OF PROFITS<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<p class=\"has-medium-font-size\">Each partner is entitled to a share of the profits.&nbsp; The partners may\nprovide that profits shall be shared in unequal propor\u00adtions.&nbsp; However, in\nthe absence of such an agreement, each partner is entitled to an equal share of\nthe profits without regard to the amount of capital or services contributed to\nthe partnership by each partner.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"8_COMPENSATION\"><\/span><strong>8. COMPENSATION<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<p class=\"has-medium-font-size\">In the absence of an agreement to the contrary, a partner is not entitled to\ncompensation for services performed for the partner\u00adship.&nbsp; Partners may\nagree that one of the partners shall devote full time as manager of the\nbusiness and may agree that a salary shall be paid to the partner in addition\nto the managing partner\u2019s share of the profits.&nbsp; This sometimes occurs in\nlegal partnerships or accounting partnerships when one of the partners is\nappointed managing partner.&nbsp; In most cases, the managing partner practices\nhis profession, but also handles the business affairs of the partnership and is\npaid or compensated in some way for this extra duty.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"9_REPAYMENT_OF_LOANS\"><\/span><strong>9. REPAYMENT OF LOANS<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<p class=\"has-medium-font-size\">A partner is entitled to reimbursement of money advanced to the partnership,\nsuch as travel expenses incurred on partnership business.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"10_CONTRIBUTION_AND_INDEMNITY\"><\/span><strong>10. CONTRIBUTION AND INDEMNITY<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<p class=\"has-medium-font-size\">If a partner pays more than his proportionate share of the debts of the partnership, he has a right to reimbursement from the other partners.&nbsp; If an employee of a partnership negligently injures a third person while acting within the scope of employment, and if the injured party collects damages from one partner, this partner is entitled to reimbursement from the other partners in order to divide the loss equally.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"11_DISTRIBUTION_OF_CAPITAL\"><\/span><strong>11. DISTRIBUTION OF CAPITAL<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<p class=\"has-medium-font-size\">If a partnership is dissolved, every partner is entitled to receive a share\nof the partnership property after due payment of all creditors and the\nrepayment of loans made to the partnership by the partners.&nbsp; Unless\notherwise stated in the partnership agree\u00adment, all partners are entitled to\nthe return of their capital contributions to the partnership.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"12_NATURE_AND_EXTENT_OF_PARTNERS_LIABILITY\"><\/span><strong>12. NATURE AND EXTENT OF PARTNER&#8217;S LIABILITY<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<p class=\"has-medium-font-size\">Partners are jointly and severally liable for all torts committed by one of\nthe partners in the scope of the partnership business.&nbsp; When partners are\nheld to be liable for an injury caused to a third person, the third person may\nsue all or any of the members of the partnership. Partners are also jointly and\nseverally liable on all partnership contracts.<\/p>\n\n\n\n<p class=\"has-medium-font-size\">Each member of a partnership has individual and unlimited liability for the\ndebts of the partnership regardless of the member\u2019s investment or interest in\nthe partnership.&nbsp; Even if a partner only owns 5% interest in the\npartnership, a judgment against the partnership in the amount of $100,000.00\ncan be collected from the 5% owner\u2019s personal assets, particularly if the\npartnership or the other partners did not have the money to pay this debt.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"13_LIABILITY_FOR_BREACH_OF_DUTY\"><\/span><strong>13. LIABILITY FOR BREACH OF DUTY<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<p class=\"has-medium-font-size\">If a partner breaches a duty to the partnership, an injured partner may\nrecover damages from the partner who breached the duty.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"14_LIABILITY_OF_NEW_PARTNERS\"><\/span><strong>14. LIABILITY OF NEW PARTNERS<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<p class=\"has-medium-font-size\">A person admitted as a partner into an existing partnership has limited\nliability for all obligations of the partnership which arose before he was\nadmitted as a partner.&nbsp; This type of claim could only be satisfied out of\npartnership property and would not extend to the individual property of a\nnewly-admitted partner.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"15_EFFECT_OF_DISSOLUTION_ON_PARTNERS_LIABILITY\"><\/span><strong>15. EFFECT OF DISSOLUTION ON PARTNER&#8217;S LIABILITY<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<p class=\"has-medium-font-size\">A partner will remain liable after dissolution of the partner\u00adship unless\nall claims against the partnership have been paid or the creditors of the\npartnership have released their claims.&nbsp; The dissolution of the\npartnership does not in and of itself discharge the existing liability of any\npartner.<\/p>\n\n\n\n<p><br \/><\/p>\n","protected":false},"excerpt":{"rendered":"<p>PARTNERSHIP BUSINESS PARTNERSHIP BUSINESS is a business where two or more persons agree to carry on commercial activity to earn profits. From legal point of view, partnership firm is not a separate legal entity. In other words, it has no existence separate from its partners. It means that in case of bankruptcy of partnership firm,&#8230;<\/p>\n<p class=\"more-link-wrap\"><a href=\"https:\/\/commerceiets.com\/partnership-business\/\" class=\"more-link\">Read More<span class=\"screen-reader-text\"> &ldquo;PARTNERSHIP BUSINESS&rdquo;<\/span> &raquo;<\/a><\/p>\n","protected":false},"author":2,"featured_media":774,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"rank_math_lock_modified_date":false,"footnotes":""},"categories":[19,21],"tags":[20],"class_list":["post-734","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-12-accountancy","category-partnership-accounts","tag-partnership"],"_links":{"self":[{"href":"https:\/\/commerceiets.com\/wp-json\/wp\/v2\/posts\/734"}],"collection":[{"href":"https:\/\/commerceiets.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/commerceiets.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/commerceiets.com\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/commerceiets.com\/wp-json\/wp\/v2\/comments?post=734"}],"version-history":[{"count":0,"href":"https:\/\/commerceiets.com\/wp-json\/wp\/v2\/posts\/734\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/commerceiets.com\/wp-json\/wp\/v2\/media\/774"}],"wp:attachment":[{"href":"https:\/\/commerceiets.com\/wp-json\/wp\/v2\/media?parent=734"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/commerceiets.com\/wp-json\/wp\/v2\/categories?post=734"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/commerceiets.com\/wp-json\/wp\/v2\/tags?post=734"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}