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Rights of Partners
Tips for Effective Business Partnership
Section 4 of the Partnership Act, 1932 defines the term Partnership as under:
PARTNERSHIP IS THE RELATION BETWEEN TWO OR MORE PERSONS WHO HAVE AGREED TO SHARE THE PROFITS OF A BUSINESS CARRIED ON BY ALL OR ANY OF THEM ACTING FOR ALL. Thus, Partnership is the name of legal relationship between/among persons who have entered in to the contract.
Sharing of profit
Mutual agency
An agreement
Business
For forming a partnership the above elements should be present. Though each element is important, Mutual Agency is the conclusive proof
Characteristics of partnership
1. 2. 3. 4. 5. 6. 7. 8. Voluntary association Mutual agency Limited life Unlimited liability Co-ownership of property Taxation Partnership agreement Restriction on transfer of interest. 9. Management.
Voluntary Association
Agreements to form a partnership are voluntary They can be dissolved at will (existing liabilities will remain however) They can be formed by an oral agreement (handshake) or a written agreement
Mutual Agency
As an agent, each and every partner can bind the partnership within the scope of the partnership business Partners, by agreement, can limit the scope of partners acting for the partnership
Outsiders, unless they have knowledge of a partners limitation to bind the partnership, can legally
Co-ownership of property
Partnership property is jointly owned by the partners regardless of which partner invests the property
Management.
In a partnership business, every partner has a right to take in his management.
Partnership Businesses
Medical Stores Health Clinic Net Caf Hotels Restaurants Boutiques
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