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what do you mean by mutual agency

Features of a partnership firm

Posted By admin on December 25, 2013 No Comments

Mutual Agency

The real test of ‘partnership firm’ is ‘mutual agency’, i.e. whether a partner can bind the firm by his act, i.e. whether he can act as agent of all other partners .

Minors admitted to the benefits of partnership

As per [section 30(1)], a person who is a minor according to the law to which he is subject may not be a partner in a firm, but, with the consent of all the partners for the time being, he may be admitted to the benefits of partnership.

Membership criteria

At least two members are required to start a partnership business.But the number of members should not exceed 10 in case of banking business and 20in case of other business.

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Partnership Agreement

This should be an agreement formed between the partners.This agreement can be express or implied.When partnership agreement is laid down in written it is called ‘partnership deed.’

Lawful Business

The partners should always join hands to carry on any kind oflawful business. To indulge in smuggling, black marketing, etc., cannot be called partnership business in the eye of the law.

Competence of Partners

Since individuals join hands to become the partners, it is necessary that they must be competent to enter into a partnership contract. Thus, minors, lunatics and insolvent persons are not eligible to become the partners.

Sharing of Profit

The main objective of every partnership firm is sharing of profits of the business amongst the partners in the agreed proportion. In the absence of any agreement for the profit sharing, it should be shared equally among the partners.

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Unlimited Liability

That means, if the assets of the firm are insufficient to meet the liabilities, the personal properties of the partners, if any, can also be utilised to meet the business liabilities.

Voluntary Registration

It is not compulsory that you register your partnership firm. However, if you don’t get your firm registered, you will be deprived of certain benefits which are as mentioned below

Restriction on Transfer of Interest

No partner can sell or transfer his interest to any one without the constent of other partners.

Continuity of Business

There are many ways by which partnership can come to an end like a partnership firm comes to an end with the consent of all the partners; in the event of death, lunacy or bankruptcy of all or all except one partner.

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what is a partnership firm?

Posted By admin on December 25, 2013 No Comments

A Partnership is defined by the Indian Partnership Act, 1932, as ‘the relation between persons who have agreed to share profits of the business carried on by all or any of them acting for all’.

This definition gives three minimum requirements to constitute a partnership:

  1. there must be an agreement entered into orally or in writing by the persons who desire to form a partnership,
  2. the object of the agreement must be to share the profits of business intended to be carried on by the partnership, and
  3. the business must be carried on by all the partners or by any of them acting for all of them.

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Email : info@companyindia.co.in

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