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    Formation of Conventional Partnership

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    syafiqah
    This document discusses the formation and rights/duties of conventional partnerships. [1] A partnership is formed when two or more persons carry on a business together with a view to profit. The partnership must involve an association of persons carrying on business in common. [2] The rights and duties of partners are defined, including the right to equal profits/contributions and duties of utmost good faith such as rendering accounts and not competing. [3] Partnerships can be terminated through agreement, by operation of law such as bankruptcy, or due to events like death or insanity of a partner.

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    Formation of Conventional Partnership

    Uploaded by

    syafiqah
    28 views2 pages
    This document discusses the formation and rights/duties of conventional partnerships. [1] A partnership is formed when two or more persons carry on a business together with a view to profit. The partnership must involve an association of persons carrying on business in common. [2] The rights and duties of partners are defined, including the right to equal profits/contributions and duties of utmost good faith such as rendering accounts and not competing. [3] Partnerships can be terminated through agreement, by operation of law such as bankruptcy, or due to events like death or insanity of a partner.

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    This document discusses the formation and rights/duties of conventional partnerships. [1] A partnership is formed when two or more persons carry on a business together with a view to profit. The partnership must involve an association of persons carrying on business in common. [2] The rights and duties of partners are defined, including the right to equal profits/contributions and duties of utmost good faith such as rendering accounts and not competing. [3] Partnerships can be terminated through agreement, by operation of law such as bankruptcy, or due to events like death or insanity of a partner.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    28 views2 pages

    Formation of Conventional Partnership

    Uploaded by

    syafiqah
    This document discusses the formation and rights/duties of conventional partnerships. [1] A partnership is formed when two or more persons carry on a business together with a view to profit. The partnership must involve an association of persons carrying on business in common. [2] The rights and duties of partners are defined, including the right to equal profits/contributions and duties of utmost good faith such as rendering accounts and not competing. [3] Partnerships can be terminated through agreement, by operation of law such as bankruptcy, or due to events like death or insanity of a partner.

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    Download as docx, pdf, or txt
    of 2

    FORMATION OF CONVENTIONAL PARTNERSHIP

     Define partnership
    Section 3(1) Partnership Act 1961
    The relation which subsist between person carrying on business in common with a view of profit

     Types of Partnership
    o Active partner
    o Dormant/Passive partner
    o Salaried partner
    o Partner by estoppel

     Several elements:

     There must be an association of persons


    o Must be > 1 person but not exceed 20 for ordinary partnership
     The person must be carrying on a business.
    Business in sec 2 of Partnership Act, incl every trade, occupation/business. Society/clubs
    is X
     The business must be carried on in common
    But not all partner must be involved. Sithambaram Chetty & Others v Hop Hing &
    Others
     The business must be carried with a view of profit.
     Sharing of profit (Sec 4c) – 5 situations

     Sharing of profits exception

    i. Sec 4c(i) the receipt by a person of a debt or liquidated amount, by instalment


    otherwise, out of the accruing profits of the business itself doesn’t make him a
    partner/liable as such (Cox v Hickman)
    ii. A contract for a remuneration of a servant/agent is repaid using profit of the firm doesn’t
    make him a partner/servant in the business (Walker v Hirsch)
    iii. Payment of annuity to a widow/child of a deceased partner doesn’t make them partner
    of the firm (I.R.C vs Lebus’s Trustees)
    iv. A person receiving by way of an annuity or otherwise, a portion of the profits of a
    business in consideration of the sale by him of the goodwill of the firm doesn’t make
    him partner Re Young
    RIGHTS & DUTIES OF PARTNERS

     According to Sec 26 (Rights)  Duties of partners based on principle


    ‘utmost in good faith’
    i. All partners must share the capital
    & profits equally. And also i. To render accounts (sec 30)
    ii. To disclose all matters affecting
    contribute equally to the losses. Or partnership (sec 30)
    share the profits according to the iii. To account of profits made (sec 31)
    contribution of capital. iv. Not to compete with firm (sec32)

    ii. Indemnify every partner against


    liabilities
    iii. A partner is not entitle before the
    ascertainment of profits to interest
    on the capital subscribed by him
    iv. Every partner may take part in the
    management of the partnership
    business
    v. No person may be introduced
    without the consent of all existing
    partners
    vi. Not entitled for remuneration

     Termination of Partnership

    i. Agreement
    ii. Operation of law
    iii. Death of partner
    iv. Bankruptcy
    v. Court( insanity)

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