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Contraact 2 prsentation
BA LLB (HONS.)
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Hello sir/mam good morning my project is on the topic every partner has right to take acion in the partnership irm however there is a dormant partner as well.
I would start by discusiing the deiniion of partner Deiniion of Partners According to Secion 4 of the Indian Partnership Act, 1932, a partnership is deined as a relaionship between two persons who mutually agreed to share the proits and losses in the business. Therefore, persons who have entered into an agreement with one another are prtner.
Further more I would to like to discuss the rights of the partners secion of the partnership act wise which are:
Secion 12(a): Right to take part in the conduct of the Business: All the partners of a partnership irm have the right to take part in the business conducted by the irm as a partnership business is a business of the partners, and their management powers are generally coextensive. 2ndly Secion 12(c): Right to be consulted: Every partner in the irm shall the right to express his opinion before the decision is made. However, there can be no changes like the business of the irm without the consent of all the partners involved. As a rouine mater, the opinion of the majority of the partners will prevail. Secion 12(d): Right of access to books: Every partner of the irm, regardless of being an acive or a sleeping partner, is enitled to have access to any of the books of the partnership irm. The partner has the right to inspect and take a copy of the same if required. However, this right must be exercised bonaide. Secion 13(a): Right to remuneraion : No partner of the irm is enitled to receive any remuneraion along with his share in the proits of the business by the irm as a result of taking part in the business of the irm. Although, this rule may always vary by an express agreement, or by a course of dealings, in which case the partner will be enitled to remuneraion. Thus, a partner may claim remuneraion even in the absence of a contract, when such remuneraion is payable under the coninued usage of the irm Secion 13(b): Right to share proits: Partners are enitled to share all the proits earned in the business equally. Similarly, the losses sustained by the partnership irm is also equally contributed. The amount of a partner’s share must be ascertained by inquiring whether there is an agreement in that behalf among the partners. If there is no agreement, then it can be presumed that the share of proit is equal and the burden of proving that the shares are unequal, will lie on the party alleging the same. Secion 13(c): Interest on capital: Secion 13(d): Interest on advances Secion 13(e): Right to be indemniied: partners of the irm have the right to be repaid by the irm in respect of the payments made and the liabiliies incurred by him in the ordinary and proper conduct of the business of the irm. This also includes the performance of an act in an emergency for protecing the irm from a loss, if the payments, liability and acion are such as a prudent man would make, incur or perform in his case, under similar circumstances. Secion 31: Right to stop the admission of a new partner Secion 37: Right of outgoing partner to share subsequent proits
Secion 40: Right to dissolve the irm In the case of Shivagouda Ravji Pail v. Chandrakant Neelkanth Sedalge , A partnership irm was being run wherein one of the partners was a minor (respondent 1) and was admited to the beneits of the partnership. The partnership was dissolved and subsequently the minor partner became a major.
There are many rights which have been given to the partners in the partnership irm to speak in the mater of the irm. However, there are a kind of partners who do not tend to speak in the maters of the irm and these partners are categorised as “silent partners” or “Dormant partners”.
This is a partner that does not paricipate in the daily funcioning of the partnership irm, i. he does not take an acive part in the daily aciviies of the irm. He is however bound by the acion of all the other partners
Rights of a dormant Partner : According to Secion 12 of the Indian Partnership Act 1932, it has been speciied that every partner has a right to take part in the conduct of business, unless and unil there is any speciied agreement signed among the partners. The primary beneit of being a dormant partner is the ability to earn investment returns with limited involvement and being in a posiion of limited liability for any inancial obligaions of the business.
Liabiliies of a dormant Partner: The liability of a dormant Partner does not extend beyond the amount of his capital investment. Such a partner is liable to third paries who give credit to the irm even without knowing of his being partner but subsequently discovering the fact. According to Secion 25 of the Indian Partnership Act, every partner is liable, jointly with all the other partners and also severally, for all acts of the irm done while he is a partner.
Pros and Cons of Being a dormantPartner in India : Becoming a dormant partner could be a great way to earn a passive income. Ater you’ve invested your funds and assets, you can take a back seat while someone else runs the show. Acive partners oten need to devote an extensive amount of ime and energy in making sure that their businesses take of. But since they don’t have the same degree of responsibility or obligaion to the companies they fund, dormant partners have plenty of ime to focus on other projects and ventures. As with any kind of investment, there will be some risk associated as a dormant partner too. There’s no guarantee that the business you’ve helped fund will succeed. If the business collapses, you could lose everything and since you won’t be involved in the day-to-day operaions, you might not have the chance (or the authority) to stop a bad situaion from geing worse.
Contraact 2 prsentation
Course: BA LLB (HONS.)
University: Dr. Ram Manohar Lohiya National Law University
