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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]
Introduction to Partnership
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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
Introduction to Partnership
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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
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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
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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
Formation of Partnership
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Formation of Partnership
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