Indian Partnership Act 1932

Partnership - Concept

Enacted in 1932.

Chapter IX - Indian Contract Act 1872.

Essentials

Section 4 of the Indian Partnership Act defines it as "the relation between persons who have agreed to share the profit of business carried on by all or any of them acting for all."

1. Relationship

2. Two or more persons.

3. Agreement or Deed.

4. Business.

5. Profit Sharing.

6. Carried on by all or any of them acting for all.

True test of Partnership

1. relationship between parties.

2. joint use of property. - not conclusive evidence.

3. active participation.

4. Example : A servant may manage the affairs of the firm, but he is not a partner.

5. Example : Joint venture having no object of profit sharing is not partnership.

6. True test of partnership - no sharing of profit - relationship of agency.

Partnership Deed

1. name of the firm and names of the partners.

2. nature and place of business.

3. the date of commencement and duration of partnership.

4. capital and banking account.

5. sharing of profit and losses.

6. management.

7. accounts.

8. arbitration.

Types of Partnership

1. Partnership for a fixed term

2. Partnership at will.

3. Particular Partnership.