Partnership Act, 1932- (Relations Of Partners to One Another) -

Partners are bound to carry on the business of the firm to the greatest common advantage,
They are bound to be just and faithful to each other, and to render true accounts.
They are bound to give full information of all things affecting the firm to any partner or his legal representative.
Partners are bound to carry on the business of the firm to the greatest common advantage,

A partner can’t deal on his own account or without the knowledge and consent of other partners. It is the fundamental duty of a partner to act and put efforts to render advantage rather profits to all partners. Thus, no secret gain or benefit is permissible by the individual partner.

According to lindley– “A partner is forbidden to make a profit or gaining for personal advantage at the expense of other partners, because if he does so, he must be said to have failed in his duty towards his firm and ultimately towards his copartners”.

Partners are bound to be just and faithful to each other, and to render true accounts.

They are bound to give true accounts of the income and expenditure of all such money that comes to them during the course of business. Thus, they are bound to be just and faithful to each other.

Partners are bound to give full information of all things affecting the firm to any partner or his legal representative.

There is no scope for concealed rather secret transactions in business of partnership. It is most importance that Each partner must be just and faithful to the other. In absence of it partnership cannot exist.

Section – 10. “Duty to indemnify for loss caused by fraud.” –

Each partner of a firm shall indemnify the firm for any loss caused to it by his fraud in the conduct of the business of the firm.

Section – 11. “Determination of rights and duties of partners by contract between the partners.” –

Subject to the provision of this Act,the mutual rights and duties of the partners of a firm may be determined by contract between the partners,
Such contract may be expressed or may be implied by a course of dealing.
The contract may be varied by consent of all the partners,
The consent may be expressed or may be implied by a course of dealing.

Agreements in restraint of trade. – (2) Notwithstanding anything contained in section 27 of the Indian Contract Act, 1872 (9 of 1872),

Such contracts may provide that a partner shall not carry on any business other than that of the firm while he is a partner.

Section – 12. “The conduct of the business.” –

Subject to contract between the partners,

(a) every partner has a right to take part in the conduct of the business.

(b) every partner is bound to attend diligently to his duties in the conduct of the business.

(c) any difference arising as to ordinary matters connected with the business may be decided by a majority of the partners, and every partner shall have the right to express his opinion before the matter is decided,but no change may be made in the nature of the business without the consent of all the partners.

(d) every partner has a right to have access to and to inspect and copy any of the books of the firm.

Section -13. “Mutual rights and liabilities.” –

Subject to contract between the partners,

(a) Not entitled for remuneration.- a partner is not entitled to receive remuneration for taking part in the conduct of the business.

(b) Partners to share equally.- the partners are entitled to share equally in the profits earned and to contribute equally to the losses sustained by the firm.

(c) Payment of interest only out of profits.- where a partner is entitled to interest on the capital subscribed by him, the interest shall be payable only out of profits;

(d) Entitlement to interest as per subscription. – a partner is entitled to interest at 6% on his advances or any payment for the purposes of the business beyond the amount of capital he has agreed to subscribe.

(e) Partners to be indemnified. – the firm shall indemnify a partner in respect of payments made and liabilities incurred by him

(i) in the ordinary and proper conduct of the business, and

(ii) in doing such act in an emergency for the purpose of protecting the firm from loss as would be done by a person of ordinary prudence in his own case under similar circumstances; and

(f) Wilful neglect to be idemnifid. – a partner shall indemnify the firm for any loss caused to it by his wilful neglect in the conduct of the business of the firm.

Section – 14. “The property of the firm.” –

Subject to contract between the partners,

The property of the firm includes all property and rights and interests in property originally brought into the stock of the firm.
The property of the firm includes all property and rights and interests in property acquired by purchase or otherwise for the firm,by or for the purposes
It includes all property and rights and interests in property in the course of the business of the firm,
It includes includes also the goodwill of the business.

Unless the contrary intention appears- property and rights and interests in property acquired with money belonging to the firm are deemed to have been acquired for the firm.

Section – 15. “Application of the property of the firm.” –

Subject to contract between the partners,

The property of the firm shall be held and used by the partners exclusively for the purposes of the business.

Section -16. “Personal profits earned by partners.” –

Subject to contract between the partners,

(a) if a partner derives any profit for himself from any transaction of the firm, he shall account for that profit and pay it to the firm. or if a partner derives any profit for himself from the use of the property or business connection of the firm, he shall account for that profit and pay it to the firm. or if a partner derives any profit for himself from the firm name, he shall account for that profit and pay it to the firm;

(b) if a partner carries on any business of the same nature as and competing with that of the firm. He shall account for and pay to the firm all profits made by him in that business.

17. “Rights and duties of partners.” –

Subject to contract between the partners

(a) after a change in the firm. If a change occurs in the constitution of a firm then the mutual rights and duties of the partners in the reconstituted firm remain the same as they were immediately before the change as far as may be.

(b) after the expiry of the term of the firm. If a firm constituted for a fixed term but continues to carry on business after the expiry of that term then the mutual rights and duties of the partners remain the same as they were before the expiry so far as they may be consistent with the incidents of partnership at will. and

(c) where additional undertakings are carried out . If a firm constituted to carry out one or more adventures or undertakings carries out other adventures or undertakings then the mutual rights and duties of the partners in respect of the other adventures or undertakings are the same as those in respect of the original adventures or undertakings.

Partnership Act, 1932

Sales of Goods Act,

Negotiable Instruments Act

Partnership Act, 1932- (Relations Of Partners to One Another)

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