Presenters: Kamran Siddiq Syed Wajahat Ali Syed Arshad Ali

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ARSHAD PART

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Section 4 of the Indian Partnership Act, 1932 defines Partnership as the relation between persons who have agreed to share the profits of a business carried on by all or anyone of them acting for all.´

There must be an agreement. ` Agreement between two or more persons. ` Must carry on some business ` Share profits of the business ` Business is carried on by all or any one of them acting for all (mutual agency)
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Based on agreement Agreement may be express or implied
In Writing : helpful in times of adversity Written agreement : ³Partnership Deed´

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Essence of Partnership : Trust & Confidence Drafted with care and signed by all partners Stamped in accordance with Indian Stamp Act Firm should be registered and copy of the Deed to be filed with the Registrar

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Prepared for resolving mutual differences Usual Contents :
Date of Agreement Name and Address of the Firm Name and Address of the Partners Nature of Business Duration of Partnership Capital invested by each partner Ratio to divide profits and loss

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Usual Contents Contd. :
Appointment of Auditor and remuneration Drawing by partners and interest Interest on Capital and Advances Salary and Commission payable to partners Duties, Functions and Powers of Partners Rules regarding admission, retirement and death Dissolution Arbitration Method of valuation of Goodwill

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Wajahat

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A contract of partnership may be entered into by every person who is competent to enter into a contract (sec 11 of the Indian Contract, 1872).
Alien Enemy: An alien enemy cannot enter into a contract of partner ship with an Indian subject. An alien friend ca do so. Minor: Minor cannot become a partner in a firm but with consent of all partners, he may be admitted to the benefits of partnership.

Person of unsound mind: a person of unsound mind is not competent to enter into a contract of partnership. Married woman: A married woman can enter into a contract of partnership. Corporation: A corporation, a registered company, can enter into contract of partnership as a single individual but not as a group of individuals comprising it.

Person who have entered into partnership with one another are called individually µpartners¶ and collectively a µfirm¶, and under which the business is carried on is called µfirm name¶(sec 4,para 2)

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Name under which the business is carried on Any name Should not be a name already adopted by a reputed firm, to mislead public

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Should not contain words : Crown, Emperor, King, Queen, Royal, Empire, Imperial or words expressing or implying the sanction, approval or patronage of Government

Partnership Not a separate person Contractual obligation Individual property of partners Dissolution on cessation

Firm Separate juristic person Perpetual succession Can hold property and sue or be sued in its own name

Members can come and leave Partners inter se contract Members contract with Co Contractual liability Members liability may be ltd. No requirement Accounts & Audit mandatory

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Khurram part

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Partnership at Will
No provision in contract between the partners for
Duration of Partnership Determination of Partnership

If any partner gives notice of dissolution in writing, the partnership is dissolved.

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Particular Partnership
A person may become a partner with another person in particular adventures or undertakings. On completion of such a venture, the partnership comes to an end.

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Partnership for a Fixed Term
Duration is fixed Partnership comes to an end when the term expires. If Partners continue the business after the fixed period, it becomes partnership at will.

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Actual or Active Partner
Engaged in actual conduct of the business His acts binds the firm and other partners Notice to be given in case of retirement

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Sleeping or Dormant Partner
Does not take part in the conduct of business Contributes his share of capital and enjoys profits and losses Not known to outside world Not liable to third parties for the acts of the firm. Not required to give notice in case of retirement

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Nominal Partners
No real interest in business, Does not contribute any capital, Lends his name only No share in profits but liable to third parties for all acts of the firm

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Partner in Profits only
Shares the profits but not losses No interest in the management of the firm Liability for the acts of the firm is unlimited

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4th Member

Rights Take part in business Express opinion (majority to prevail) Express opinion (majority to prevail) Joint ownership Right to be indemnified Right to resist introduction of new partner Right to access to books of accounts

Duties Carry business in best mutual interest Just and Faithful Diligently attend business Share profits/loss as per contract Indemnify partners for loss due to fraud Not to assign Render true and fair accounts

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The dissolution of partnership between all the partners of a firm is called µdissolution of firm¶ (sec 39).This means there is difference between µdissolution of partnership¶ and µdissolution of firm¶.

MODE OF DISSOLUTION OF FIRM Dissolution Without Order of Court By Agreement (Sec 40) Compulsory Dissolution (Sec 41) On happening of Certain Contingencies (Sec 42) Dissolution by Court

By Notice (Sec 43)

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Kamran

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Dissolution By Agreement:
With the consent of all partners In accordance with a contract between them. The contract of the dissolution of the firm may be expressed or implied
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Compulsory Dissolution :
Business of the firm become unlawful. Insolvency of all partners, or all but one partner, a partner on being adjudicated insolvent ceases to be a partner from the date of order of insolvency.

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On Happening of Certain Contingencies:
The expiry of the term for which the firm was constituted. The completion of particular adventure or adventures. if the firm is constituted for the execution thereof. The death of partner and, The adjudication of a partner as an insolvent

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By Notice: When partnership at will it can be dissolve by any partner by given notice to other. The notice should contain clearance and valid reason of intention to dissolve partnership in writing and signed by him and also to be served to all partners.

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Under section 44. the court may at the suit of a partner, dissolve a firm on the following grounds:
Insanity (Sec 44 a): Where a partner become unsound mind, the court may dissolve the firm on the petition of any other partner. Permanent Incapacity: (Sec 44b): Where a partner become in any way permanently incapable of performing his duties as a partner, the court may dissolve the firm.

Misconduct (Sec 44 c): Where a partner other than partner suing, is guilty of misconduct and it is likely to affect prejudicially the carrying on the business, the court may dissolve the firm. Persisitant Breach of agreement: (Sec 44d): Where a partner other than partner suing, wilfully or persistently commits the breach of the partnership agreement relating to the management of the affair of the firm , or otherwise so conduct himself that is not reasonably practicable for the other partner to carry out the business with him, the court may dissolve the firm.

Transfer of Interest (Sec 44 e): Where a partner has in
any way transferred the whole of his interest in the firm to a third party or where his share has been attached under decree, or sold in recovery of arrears of land revenue, the court may dissolve the firm at a instance of any other partner.

Business working at loss: (Sec 44e): Where the
business of the firm cannot be carried on except at a loss, the court may dissolve the firm at the suit of partner. Any other Ground: (Sec 44f): The court may dissolve a firm on any ground which renders it just and equitable that the firm should be dissolved .