1. Prof. P. K. Kshirsagar
Business Law
S.Y. B. Com.

2. Indian Partnership Act,1932

3. What is a Law ?
“Law is body of Principle recognized and applied by  the state in the administration of Justice”
“Law is rule of external human action enforced by the sovereign political authority”
A law is the rule of conduct, imposed and enforced by the sovereign.

4. INTRODUCTION
Partnership is the relationship between persons who have agreed to share the profits of a business that is carried on by one of them or all of them as per Sir Fredrick Pollock. The English Partnership Act, 1890 defines partnership as the relation subsisting between persons carrying on business in common with a view to profits.
Indian Partnership Act is one of very old mercantile law. In 1932, the chapter XI of the Indian Contract Act, was repealed and the Indian Partnership Act came into existence. The Act came into force on the 1st day of October The Act is not applicable to Jammu and Kashmir. The IPA was passed to define and amend the law relating to partnership. But it is not exhaustive on the topic of partnership as admitted in the of the Act.  There is nothing in the Act that implies that the Act should be given a retrospective effect.

5. What is a Indian Partnership?
The Indian Partnership Act, 1932 is an act enacted by the Parliament of India to regulate partnership firms in India. It received the assent of the Governor-General on 8 April 1932 and came into force on 1 October Before the enactment of this act, partnerships were governed by the provisions of the Indian Contract Act. 

6. DEFINITIONS
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:
“Business” includes every trade, occupation and profession;
“Prescribed” means prescribed by rules made under this Act;
“Third party” used in relation to a firm or to a partner therein means any person who is not a partner in the firm; and
Expression 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.

7. Features of Partnership Firms
Agreement: 
Agreement is the base of partnership.
Without agreement there cannot be partnership. The partnership comes into existence by an agreement or contract (oral or written). The purpose of agreement should be for business & profit. (2) Sharing of Profits: 
The main object of partnership is to make profit & to share these profit either equally or as per agreement. If agreement is silent then they share profit equally as provided in the "Indian Partnership Act, 1932".

8. 3) Presence of Lawful Business:
The business of the partnership firm should be for profit making & also it should be as per the law of land. A partnership firm cannot perform charitable activities.  (4) Number of Partners: 
The single individual cannot start partnership. There must be at least two or more persons to start a partnership business. According to Indian Partnership Act, 1932.  (5) Common Management: 
All partners of partnership can take active part in the management. It means partnership has common management. But practically it is not possible & convenient. Therefore it is managed by one or two partners on behalf of all other partners.

9. Essential Elements of a Partnership Firm
All of 5 elements mentioned above must co-exist in order to constitute a partnership. If any of these is not present, there cannot be a partnership. These 5 essential elements of a partnership firm are explained below in detail.

10. Restrictions on the number of persons
The maximum number of members that can exist in partnership is 10 in case of a firm carrying on banking business and 20 in case of any other business.
Who have agreed
There should be an agreement between those persons who are forming the partnership. The agreement is the foundation for the partnership. Partnerships can arise only from a contract and not status.
Indian Partnership Act, 1932 
The profits of a business
There should be a business carried on by the partnership and that too with an intention to make and share profits of that business.
Carried on by all or any of them acting for all
The business may be carried on by any one or more of the partner

11. Types of Partnerships
A partnership arises whenever two or more people co-own a business, and share in the profits and losses of the business.  Each person contributes something to the business -- such as ideas, money, or property -- though management rights and personal liability will vary depending on which of three modern partnership forms the business takes: general partnership, limited partnership, or limited liability partnership

12. 2 ) Limited Partnerships:-
1 ) General Partnerships:-
A general partnership involves two or more owners carrying out a business purpose.  General partners share equal rights and responsibilities in connection with management of the business, and any individual partner can bind the entire group to a legal obligation.
2 ) Limited Partnerships:-
A limited partnership allows each partner to restrict his or her personal liability to the amount of his or her business investment.  Not every partner can benefit from this limitation -- at least one participant must accept general partnership status, exposing himself or herself to full personal liability for the business's debts and obligations.

13. 3) Limited Liability Partnerships :-
Limited liability partnerships (LLP) retain the tax advantages of the general partnership form, but offer some personal liability protection to the participants.  Individual partners in a limited liability partnership are not personally responsible for the wrongful acts of other partners, or for the debts or obligations of the business.  Because the LLP form changes some of the fundamental aspects of the traditional partnership.

14. Partnership Deed
The written agreement duly signed by the partners is known as partnership deed. It is also known as agreement or article of partnership. It is the document, which mentions the rules and regulations, way o operation of management and way of control of activities of the firm. It is also required at the time of registration. It helps to minimize conflict and misunderstanding among the partners.

15. Content of partnership deed
Name and address of the firm
Name and address o the partners
Nature of rim’s business
Duration of partnership
Amount of capital invested by the partners.
Interest on capital
Division of profit
Salary and commission
Right and duties of partner

16. Liabilities of the partners
1) General Duties :-
According to every partner is liable to carry on the business in the best interest of the firm, to be just and faithful to each other, and to render true accounts and full information affecting the firm to any partner or his legal representative. During the course of business no partner can do any act which may be against his duty to work to greatest common advantage.
2) Duty to indemnify for loss caused by fraud : -  According to every partner shall indemnify the firm for any loss caused to it by his fraud in the conduct of the business of the firm. For example, a firm of A and B enter into a contract with the government. Later on, due to B's conduct, the govt. cancels the contract and gives it to B. Here, the contract obtained by B in his own name will be for the benefit of the partnership

17. 3) Duties imposed by contract :-
As per any special rights and duties may be given or imposed by the contract between the partners.
4) Duty relating to the conduct of business :-
According to  every partner is bound to attend to his duties diligently. Thus, if a partner is assigned some task, he must do it to the best of his abilities. Further, if any difference arises in respect of ordinary business matter, it may be decided by majority. However, no change in the nature of business can be made without the consent of all the partners.
5) Duty to contribute equally to the losses :-
According to partners shall contribute equally to the losses sustained by the firm.

18. DISSOLUTIONOF A FIRM Dissolution of firm Dissolution by agreement
Compulsory dissolution
Dissolution on the happening of certain contingencies
Dissolution by notice of partnership at will
Dissolution by the
Liability for acts of partners done after dissolution
Right of partners to have business wound up after
dissolution.

19. Rights Of The Partners 1) Rights given by contract -
As per Section11 any special rights, such as right to remunerationmay be given by the contract between the partners.
2) Right to take part in the conduct of business - 
As per , subject to the contract between them, a partner has a right to take part in the conduct of business. Only way to restrain a partner from getting involved in the business is to specify it in the contract of partnership. Even courts cannot, through an injunction, restrain a partner.

20. 4) Right to receive interest on the capital subscribed :-
3) Right to indemnity in respect of payments made and liabilities incurred :- 
According to section 13, the firm shall indemnify a partner in respect of payments made and liabilities incurred by him in the ordinary and proper conduct of business or in doing such act, in an emergency, for the purposes of protecting firm from loss as would be done by a person of ordinary prudence in his own case under similar circumstance.
4) Right to receive interest on the capital subscribed :- 
As per section 13, subject to contract, where a partner is entitled to interest on the capital subscribed by him, such interest shall be payable only out of profits. Further, if a partner pays any money to the firm, beyond the amount of capital, he is entitled to 6% interest.

21. 5) Right to have access to and inspect and copy books of the firm :-
  As per every partner has a right to inspect the books and make a copy if he wants.
6) Right to share in profit :- 
As per subject to contract, a partner is entitled to an equal share of the profit.

22. INCOMING AND OUTGOING PARTNERS
Introduction of a partner Subject to contract between the
partners and to the provisions of m no person shall be
introduced as a partner into a firm without the consent of all the existing
partners. Subject to the provisions of a person who is introduced
as a partner into a firm does not there by become liable for any act of
the firm done before he became a partner.

23. Retirement Of A Partner
Expulsion of a partner
Liability of estate of deceased partner
Rights of outgoing partner to carry on competing business
Right of outgoing partner in certain cases to share
subsequent profits -

24. Thank You