Untitled 5
1. Introduction:
Partnership is the relation between persons who have agreed to share the profit of business carried on by all or any of them acting for all. The person who have entered into partnership with one another are called partner. The rights and duties of partner. The rights and duties of partners are determined in accordance with the agreement of the firm, are agent as well as principals.
2. Partner:
The person who enters into partnership trough agreement is known as partner. He has agreed to divide profit and share in loss.
3. Kinds of partner:
Following are kinds of partner:
(i) Active partner
(ii) Silent partner
(iii) Partner in profit
(iv) Secret partner
(v) Nominal partner
(vi) Sub-partner
(vii) Partner by estoppels
(viii) Junior partner
(ix) Senior partner
(x) Minor partner
(xi) Partner with limited liability
(xii) Partner with unlimited liability
4. Rights of partner:
Following are the rights of a partner.
(I) Right to manage the business:
Every partner has right to take part in the management of business.
(II) Right to express opinions:
Every partner has right to express his opinions relation to business matters.
(III) Right to access the accounts books.
Every partner has right to access the account books of firm.
(IV) Right to share the profit:
Every partner has right to share the profit of the business.
(V) Right to interest on capital:
Every partner can charge interest on capital contributed by him.
(VI) Right to interest on advances:
Every partner has right to interest on advances at the of 6% per annum.
(VII) Right to be indemnified:
Every partner has right to be indemnified by the firm in respect of payment by him.
(IX) Right to give consent for new partner:
Every partner has right to prevent the introduction of a new partner unless he consents to that.
(X) Right to retire:
Every partner has right to retire from the firm.
(XI) Right not to be expelled:
A partner can not be expelled from firm by any majority of partners provided the decision is made in good faith and there is a provision in contract.
(XII) Right to carry on competing business:
Every out going partner has a right to carry on a business similar to that of the firm subject to certain restrictions.
(XIII) Right of dissolution of firm:
Every partner has right to file suit for dissolution of firm.
(XIV) Right to restrain from use of firm name or firm property:
Every partner has the right to see that the property of the firm is used only for the purpose of partnership.
(XV) Right of the partner who leaves the firm due to any reason is entitled to claim any share according to the agreement.
5. Duties of partner:
Following are the duties of a partner.
(I) Duty to carry on business:
Every partner is bound to carry on the business of the firm to common advantage.
(II) Duty to maintain true accounts:
Every partner must render true and proper account to his co-partner.
(III) Duty to keep secrecy:
It is duty of every partner that he should maintain the secrecy for the business.
(IV) Duty to provide information:
Every partner should provide all the necessary information about the business to co-partners.
(V) Duty to compensate:
It is duty of every partner to compensate any loss incurred by him.
(VI) Duty to abide by the decisions:
Every partner should abide by the decision taken by the majority of the partners.
(VII) Duty to share the loss:
Every partner shall bear the loss equally borne by the firm irrespective of their capital contribution.
(VIII) Duty not to use firm property for his own.
It is the duty of every partner of the firm to hold and use the property of the firm only for the purpose of business.
(IX) Sincere and faithful:
Every partner should be just and faithful to the other partners.
(X) Duty to indemnify for willful neglect:
Every partner shall indemnify the firm for any loss caused to it by his willful neglect in the conducted of business of firm.
(XI) Duty not to carry other business.
It is the duty of a partner not to carry other business.
(XII) Duty to pay profit to firm:
If a partner earns profit from any source of the firm it should be paid to firm.
(XIII) Duty to be liable jointly and severally:
Every partner is liable jointly and severally for all the acts of the firm.
(XIV) Duty not to transfer his rights:
A partner cannot transfer his rights and interest in the firm to an outsider to make him partner in the business without the consent of others partners.
6. Conclusion:
To conclusion it can be said that, partner is a person who has agreed to share the profit of the business. Each partner acts as an agent of the other partner of the firm. Every partner has right and duties under the agreement made by them.