Chapter-III, containing section 9
to 17 of the Indian partnership Act, 1932 entitled "Relations of
partners to one another" lays down the provisions relating to "Rights
and Duties of partners". Partnership is a special kind of
contract/agreement. It need not be in writing and its registration also
is not necessary/compulsory.
However, to avoid further disputes, the relation of partnership is created by means of a written instrument called "the partnership deed" Further to avoid certain disabilities, of non-registration, it is desirable to register the partnership firms. Section 11 of the partnership Act empowers the determination of rights and Duties of partners by agreement between them. Such agreement/contract may be expressed in the partnership deed or may be implied by a course of dealing
Rights of partners :
If the partnership agreement is silent as to (does not contain) the rights of the partners, the following provisions as laid down in the partnership Act are applicable :
1. Right to take part in conduct of the business (S.12(a);
2. Right to be consulted
3. Right to access to book
4. Right to indemnity
5. Right to claim remuneration. Profits and interest on capital
1. Right to take part in conduct of the business -
Section 12(a) of the partnership Act confers on every partner a right to take active part in the conduct of the business. Every partner has got an inherent right to take part in the conduct of the business.
2. Right to be consulted :
According to Section 12 (e) of the Partnership Act any difference arising as to ordinary matters connected with business may be decided by a majority of the partners, and every partner have the right to express his opinion before the matter is decided, but no change may me made in the nature of the business without the consent of all the partners.
3. Right to access to books:
According to Section 12(d) of Partnership Act, every partner has a right to access to and to inspect and copy of the books and of the firm.
4. Right to indemnity S.13(e) :-
The term 'indemnity' means "promise to make good the loss ". According to section 13 (e), every partner has a right claim indemnity from the firm (or to be indemnified by the firm). This right is available against payments Made by him for conduct of the business and for acts done in emergency to save the firm from losses. A Partner will be entitled to be indemnified for payment made by him in the ordinary and proper conduct of business for doing such acts as an ordinary and prudent man would do in times of emergency.
Relevant Case Law
Thomas vs. Atherton 1877
In this case, there was a dispute between two firms pertaining to their boundaries. One partner of a firm, who trespassed the boundary, was asked to pay compensation. He paid the compensation and claimed indemnity from the firm for the compensation paid. In an action against the firm for indemnity, It was held that the plaintiff (partner) is not entitled to the right of indemnity on the ground that trespass in no way connected with the business.
5. Right to claim remuneration, profits and interest on capital :--
Section 13 (a) , 13 (b) and 13 (c&d) of the partnership Act, confer on partner right to claim remuneration, profits and interest on capital respectively.
However, to avoid further disputes, the relation of partnership is created by means of a written instrument called "the partnership deed" Further to avoid certain disabilities, of non-registration, it is desirable to register the partnership firms. Section 11 of the partnership Act empowers the determination of rights and Duties of partners by agreement between them. Such agreement/contract may be expressed in the partnership deed or may be implied by a course of dealing
Rights of partners :
If the partnership agreement is silent as to (does not contain) the rights of the partners, the following provisions as laid down in the partnership Act are applicable :
1. Right to take part in conduct of the business (S.12(a);
2. Right to be consulted
3. Right to access to book
4. Right to indemnity
5. Right to claim remuneration. Profits and interest on capital
1. Right to take part in conduct of the business -
Section 12(a) of the partnership Act confers on every partner a right to take active part in the conduct of the business. Every partner has got an inherent right to take part in the conduct of the business.
2. Right to be consulted :
According to Section 12 (e) of the Partnership Act any difference arising as to ordinary matters connected with business may be decided by a majority of the partners, and every partner have the right to express his opinion before the matter is decided, but no change may me made in the nature of the business without the consent of all the partners.
3. Right to access to books:
According to Section 12(d) of Partnership Act, every partner has a right to access to and to inspect and copy of the books and of the firm.
4. Right to indemnity S.13(e) :-
The term 'indemnity' means "promise to make good the loss ". According to section 13 (e), every partner has a right claim indemnity from the firm (or to be indemnified by the firm). This right is available against payments Made by him for conduct of the business and for acts done in emergency to save the firm from losses. A Partner will be entitled to be indemnified for payment made by him in the ordinary and proper conduct of business for doing such acts as an ordinary and prudent man would do in times of emergency.
Relevant Case Law
Thomas vs. Atherton 1877
In this case, there was a dispute between two firms pertaining to their boundaries. One partner of a firm, who trespassed the boundary, was asked to pay compensation. He paid the compensation and claimed indemnity from the firm for the compensation paid. In an action against the firm for indemnity, It was held that the plaintiff (partner) is not entitled to the right of indemnity on the ground that trespass in no way connected with the business.
5. Right to claim remuneration, profits and interest on capital :--
Section 13 (a) , 13 (b) and 13 (c&d) of the partnership Act, confer on partner right to claim remuneration, profits and interest on capital respectively.
0 comments:
Post a Comment