Notes – Corporate Law ( Commercial Law) Partnership Act 1932

Prepared by Assist. Professor Rekha Khandelwal

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Nature and Essentials of partnership

Relations of Partners to One Another

Corporate Law ( Commercial Law) Partnership Act 1932 An Introduction with Flow Chart

According Section 1.

The Indian Partnership Act was enacted in 1932. It came into force on 1st October 1932 except provisions of Section 69. The Provisions of Section 69 came into force 1st October 1933. The Act has not retrospective effect. It is known the name of The Indian Partnership Act, 1932. It extends to whole India (including Jammu & Kashmir from 31st Oct. 2019 by J & K Reorganisation Act 2019.

 The Act superseded the earlier law, which was contained in Chapter XI of the Indian Contract Act, 1872. The Partnership Act 1932 is not complete in itself. It is expressly mentioned that the provision of Indian Contract Act which is not repealed will be applicable on Partnership until and unless such provision is in contrary to any provision of Partnership Act, 1932.

Partnership is ruled by the Partnership Act 1932. It is also ruled by the general provision of the Indian Contract Act on such matters where the Partnership Act is silent.

It is a business organization where two or more persons agreed to join together to carry out the business for the purpose of earning the profits.

There are 8 Chapters, 74 Sections and 2 Schedules in Partnership Act, 1932.

Flow Chart of Partnership Act, 1932

Chapter No.Chapter NameSection No.  
I   Priminary1. Short title, extent and commencement
2. Definitions
3. Application of Provisions of Act 9 of 1872
IIThe Nature of Partnership4.  Definition of partnership, partner, firm and firm name.
5.  Partnership not created by status
6.  Mode of determining existence of partnership
7. Partnership at will
 8. Particular partnership
IIIRelations of Partners to One Another9. General duties of partners
10. Duty to indemnify for loss caused by fraud
11. Determination of rights and duties of partners by contract between the partners
12. The conduct of the business
13. Mutual rights and liabilities
14. The property of the firm
15. Application of the property of the firm
16. Personal profits named by partners
17. Rights and duties of partners
IVRelation of Partners to Third Parties18. Partners to be agent of the firms
19. Implied authority of partner as agent of the firm
20.Extension and restriction of partner’s implied authority.
21.Partner’s authority in an emergency
22. Mode of doing act to bind firm
23. Effect of admissions by a partner
24. Effect of notice to acting partner 25. Liability of a partner for acts of the firm
26. Liability of the firm for wrongful acts of a partner
27. Liability of firm for misapplication by partners
28. Holding out
29. Rights of transferee of a partner’s interest
30. Minors admitted to the benefits of partnership.
VIncoming and Outgoing Partners31. Introduction of a partner
32. Retirement of a partner
33. Expulsion of a partner
34. Insolvency a partner
35. Liability of estate of deceased partner
36. Rights of outgoing partner to carry on competing business
37.Right of outgoing partner in certain cases to share subsequent profits
38. Revocation of continuing guarantee by change in firm
VIDissolution of a Firm39. Dissolution of firm
40. Dissolution by agreement
41. Compulsory dissolution
42. Dissolution on the happening of certain contingencies
43.  Dissolution by notice of partnership at will
44. Dissolution by the Courts
45. Liability for acts of partners done after dissolution
46. Right of partners to have business wound up after
47. dissolution. Continuing authority of partners for purposes of winding up
48. Mode of settlement of accounts between partners
49. Payment of firm debts and of separate debts
50. Personal profits earned after dissolution
51. Return of premium on premature dissolution
52. Rights where partnership contract is rescinded for fraud or misrepresentation
53. Rights to restrain from use of firm name or firm property
54. Agreements in restraint of trade 55. Sale of good will after dissolution
VIIRegistration of Firms56. Power to exempt from application of this Chapter
57. Appointment of Registrar
58. Application of registration
59. Registration
60. Recording of alterations in firm name and principal place of business
61. Noting of closing and’opening of branches
62. Noting of changes in names and addresses of partners
63. Recording of changes in and dissolution of a firm
64. Rectification of mistakes
65. Amendment of Register by order of court
66. Inspection of Register and filed documents
67. Grant of copies
68. Rules of evidence
69. Effect of non- registration
70. Penalty for furnishing of false particulars
71. Power to make rules
VIIISupplemental72. Mode of giving public notice
73. [Repeals]
74. Saving

Section – 2 Definitions

(a) “An Act of a Firm means any act or omission by all the partners, or by any partner or agent of the firm which gives rise to a right enforceable by or against the firm”

(b) “Business includes every trade, occupation and profession”

(c) “Prescribed means prescribed by rules made under this Act”

(d) “Third party used in relation to a firm or to a partner therein means any person who is not a partner in the firm”

(e) “Expressions used but not defined in this Act and defined in the Indian Contract Act, 1872 (9 of 1872), shall have the meanings assigned to them in that Act.”

Unless There is anything repugnant in the subject or context,in the Act,

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