Legal Advice on Partnership Law in Pakistan

Comprehensive Legal Q&A on the Partnership Act, 1932

1. Q: What is the short title and extent of the Partnership Act, 1932? A: The short title of the Act is the “Partnership Act, 1932.” It extends to the whole of Pakistan and came into force on the 1st of October, 1932.
2. Q: Define “partnership” as per the Partnership Act, 1932. A: Partnership is the relation between persons who have agreed to share the profits of a business carried on by all or any of them acting for all.
3. Q: Who are “partners” under the Partnership Act, 1932? A: Persons who have entered into partnership with one another are individually called “partners” and collectively “a firm,” and the name under which their business is carried on is called the “firm name.”
4. Q: How is a partnership created according to the Act? A: The relation of partnership arises from contract and not from status.
5. Q: What is the mode of determining the existence of a partnership? A: In determining whether a group of persons is or is not a firm, regard shall be had to the real relation between the parties as shown by all relevant facts taken together.
6. Q: Can a partnership be created by status? A: No, a partnership is not created by status. It must arise from a contract between the parties.
7. Q: What is a “partnership-at-will”? A: A partnership-at-will is one where no provision is made by contract between the partners for the duration of their partnership, or for the determination of their partnership.
8. Q: What is a “particular partnership”? A: A particular partnership is one in which a person may become a partner with another person in particular adventures or undertakings.
9. Q: What are the general duties of partners? A: Partners are bound to carry on the business of the firm to the greatest common advantage, to be just and faithful to each other, and to render true accounts and full information of all things affecting the firm to any partner or his legal representative.
10. Q: What is the duty to indemnify for loss caused by fraud? A: Every partner shall indemnify the firm for any loss caused to it by his fraud in the conduct of the business of the firm.
11. Q: Can the rights and duties of partners be determined by contract? A: Yes, subject to the provisions of the Act, the mutual rights and duties of the partners of a firm may be determined by contract between the partners, and such contract may be expressed or implied by a course of dealing.
12. Q: What is the implied authority of a partner? A: Subject to the provisions of the Act, the act of a partner which is done to carry on, in the usual way, business of the kind carried on by the firm binds the firm.
13. Q: Can the implied authority of a partner be restricted? A: Yes, the partners in a firm may, by contract between the partners, extend or restrict the implied authority of any partner.
14. Q: What is a partner’s authority in an emergency? A: A partner has authority, in an emergency, to do all such acts for the purpose of protecting the firm from loss as would be done by a person of ordinary prudence in his own case, acting under similar circumstances.
15. Q: What is the effect of admissions by a partner? A: An admission or representation made by a partner concerning the affairs of the firm is evidence against the firm, if it is made in the ordinary course of business.
16. Q: What is the liability of a partner for acts of the firm? A: Every partner is liable, jointly with all the other partners and also severally, for all acts of the firm done while he is a partner.
17. Q: What is the liability of the firm for wrongful acts of a partner? A: Where by the wrongful act or omission of a partner acting in the ordinary course of the business of a firm, or with the authority of his partners, loss or injury is caused to any third party, the firm is liable to the same extent as the partner.
18. Q: What is the liability of the firm for misapplication by a partner? A: If a partner acting within his apparent authority receives money or property from a third party and misapplies it, or if the firm in the course of its business receives money or property from a third party, and the money or property is misapplied by any of the partners while it is in the custody of the firm, the firm is liable to make good the loss.
19. Q: What is “holding out” in the context of a partnership? A: If any person represents himself or knowingly permits himself to be represented as a partner in a firm, he is liable as a partner to anyone who has on the faith of such representation given credit to the firm.
20. Q: Can minors be admitted to the benefits of partnership? A: Yes, 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.
21. Q: What happens to a minor’s share in the firm upon attaining majority? A: At any time within six months of his attaining majority, or of his obtaining knowledge that he had been admitted to the benefits of partnership, whichever date is later, such person may give public notice that he has elected to become or not to become a partner in the firm, and such notice shall determine his position as regards the firm.
22. Q: What are the rules regarding the introduction of a partner? A: Subject to contract between the partners and to the provisions of section 30, no person shall be introduced as a partner into a firm without the consent of all the existing partners.
23. Q: What are the rules regarding the retirement of a partner? A: A partner may retire with the consent of all the other partners, in accordance with an express agreement by the partners, or where the partnership is at will, by giving notice in writing to all the other partners of his intention to retire.
24. Q: What is the effect of the insolvency of a partner on the partnership? A: Where a partner in a firm is adjudicated an insolvent, he ceases to be a partner on the date on which the order of adjudication is made, whether or not the firm is thereby dissolved.
25. Q: What is the liability of the estate of a deceased partner? A: Where under a contract between the partners the firm is not dissolved by the death of a partner, the estate of a deceased partner is not liable for any act of the firm done after his death.
26. Q: Can an outgoing partner carry on a competing business? A: Yes, an outgoing partner may carry on a business competing with that of the firm and he may advertise such business, but, subject to contract to the contrary, he may not use the firm name, represent himself as carrying on the business of the firm, or solicit the custom of persons who were dealing with the firm before he ceased to be a partner.
27. Q: What are the rights of an outgoing partner in certain cases to share subsequent profits? A: Where any member of a firm has died or otherwise ceased to be a partner, and the surviving or continuing partners carry on the business of the firm with the property of the firm without any final settlement of accounts as between them and the outgoing partner or his estate, then, in the absence of a contract to the contrary, the outgoing partner or his estate is entitled at the option of himself or his representatives to such share of the profits made since he ceased to be a partner as may be attributable to the use of his share of the property of the firm or to interest at the rate of six percent per annum on the amount of his share in the property of the firm.
28. Q: What is the effect of a change in the constitution of a firm on a continuing guarantee? A: A continuing guarantee given to a firm or to a third party in respect of the transactions of a firm is, in the absence of agreement to the contrary, revoked as to future transactions from the date of any change in the constitution of the firm.
29. Q: What constitutes the dissolution of a firm? A: The dissolution of partnership between all the partners of a firm is called the “dissolution of the firm.”
30. Q: How can a firm be dissolved by agreement? A: A firm may be dissolved with the consent of all the partners or in accordance with a contract between the partners.
31. Q: What are the grounds for compulsory dissolution of a firm? A: A firm is dissolved by the adjudication of all the partners or all the partners but one as insolvent or by the happening of any event which makes it unlawful for the business of the firm to be carried on or for the partners to carry it on in partnership.
32. Q: What events can lead to the dissolution of a firm? A: A firm is dissolved if constituted for a fixed term, by the expiry of that term; if constituted to carry out one or more adventures or undertakings, by the completion thereof; by the death of a partner; and by the adjudication of a partner as an insolvent.
33. Q: How can a partnership-at-will be dissolved? A: Where the partnership is at will, the firm may be dissolved by any partner giving notice in writing to all the other partners of his intention to dissolve the firm.
34. Q: Under what conditions can the Court dissolve a firm? A: At the suit of a partner, the Court may dissolve a firm on various grounds such as the insanity or permanent incapability of a partner, conduct prejudicial to the business, persistent breach of agreements, transfer of interest to a third party, business being carried on at a loss, or any other ground rendering it just and equitable.
35. Q: What is the liability for acts of partners done after dissolution? A: Notwithstanding the dissolution of a firm, the partners continue to be liable as such to third parties for any act done by any of them which would have been an act of the firm if done before the dissolution, until public notice is given of the dissolution.
36. Q: What rights do partners have to wind up the business after dissolution? A: On the dissolution of a firm, every partner or his representative is entitled, as against all the other partners or their representatives, to have the property of the firm applied in payment of the debts and liabilities of the firm, and to have the surplus distributed among the partners or their representatives according to their rights.
37. Q: What authority do partners have after the dissolution of a firm for the purpose of winding up? A: After the dissolution of a firm, the authority of each partner to bind the firm, and the other mutual rights and obligations of the partners, continue so far as may be necessary to wind up the affairs of the firm and to complete transactions begun but unfinished at the time of the dissolution.
38. Q: What are the rules for the settlement of accounts between partners after dissolution? A: In settling the accounts of a firm after dissolution, losses are to be paid first out of profits, next out of capital, and lastly, if necessary, by the partners individually in the proportions in which they were entitled to share profits. The assets of the firm are applied in paying the debts of the firm to third parties, what is due to partners for advances, what is due to partners on account of capital, and the residue is divided among the partners in the proportions in which they were entitled to share profits.
39. Q: What are the rules for the payment of firm’s debts and separate debts? A: Where there are joint debts due from the firm, and also separate debts due from any partner, the property of the firm shall be applied in the first instance in payment of the debts of the firm, and if there is any surplus, then the share of each partner shall be applied in payment of his separate debts or paid to him. The separate property of any partner shall be applied first in the payment of his separate debts, and the surplus in the payment of the debts of the firm.
40. Q: What is the rule regarding personal profits earned after dissolution? A: Subject to contract between the partners, the provisions regarding personal profits earned by partners apply to transactions by any surviving partner or by the representatives of a deceased partner, undertaken after the firm is dissolved on account of the death of a partner and before its affairs have been completely wound up.
41. Q: What are the rights regarding the return of premium on premature dissolution? A: Where a partner has paid a premium on entering into partnership for a fixed term, and the firm is dissolved before the expiration of that term otherwise than by the death of a partner, he shall be entitled to repayment of the premium or of such part thereof as may be reasonable, unless the dissolution is mainly due to his own misconduct, or in pursuance of an agreement containing no provision for the return of the premium or any part of it.
42. Q: What are the rights where a partnership contract is rescinded for fraud or misrepresentation? A: The party entitled to rescind is entitled to a lien on the surplus of the assets of the firm remaining after the debts have been paid for any sum paid by him for the purchase of a share in the firm and for any capital contributed by him, to rank as a creditor of the firm in respect of any payment made by him towards the debts of the firm, and to be indemnified by the partner or partners guilty of the fraud or misrepresentation against all the debts of the firm.
43. Q: What is the right to restrain from use of firm name or firm property after dissolution? A: After a firm is dissolved, every partner or his representative may, in the absence of a contract between the partners to the contrary, restrain any other partner or his representative from carrying on a similar business in the firm name or from using any of the property of the firm for his own benefit, until the affairs of the firm have been completely wound up.
44. Q: What agreements in restraint of trade are valid under the Act? A: Partners may, upon or in anticipation of the dissolution of the firm, make an agreement that some or all of them will not carry on a business similar to that of the firm within a specified period or within specified local limits, and such agreement shall be valid if the restrictions imposed are reasonable.
45. Q: What are the rules regarding the sale of goodwill after dissolution? A: In settling the accounts of a firm after dissolution, the goodwill shall be included in the assets, and it may be sold either separately or along with other property of the firm. A partner may carry on a business competing with that of the buyer and may advertise such business, but may not use the firm name, represent himself as carrying on the business of the firm, or solicit the custom of persons who were dealing with the firm before its dissolution, unless otherwise agreed.
46. Q: What powers do Registrars have under the Act? A: The Provincial Government may appoint Registrars of Firms for the purposes of the Act and may define the areas within which they shall exercise their powers and perform their duties.
47. Q: How is the registration of a firm effected? A: The registration of a firm may be effected at any time by sending by post or delivering to the Registrar of the area in which any place of business of the firm is situated or proposed to be situated, a statement in the prescribed form and accompanied by the prescribed fee, stating the firm name, the place or principal place of business, the names of any other places where the firm carries on business, the date when each partner joined the firm, the names in full and permanent addresses of the partners, and the duration of the firm. The statement must be signed by all the partners or by their agents specially authorized in this behalf.
48. Q: What happens when there is an alteration in the firm name or location of the principal place of business? A: A statement specifying the alteration must be sent to the Registrar, signed and verified in the prescribed manner. The Registrar shall amend the entry relating to the firm in the Register of Firms in accordance with the statement and file it along with the statement relating to the firm filed under the Act.
49. Q: What is the effect of non-registration of a firm? A: No suit to enforce a right arising from a contract or conferred by the Act shall be instituted in any Court by or on behalf of any person suing as a partner in a firm against the firm or any person alleged to be or to have been a partner in the firm unless the firm is registered and the person suing is or has been shown in the Register of Firms as a partner in the firm.
50. Q: What is the penalty for furnishing false particulars? A: Any person who signs any statement, amending statement, notice or intimation under the Act containing any particular which he knows to be false or does not believe to be true, or containing particulars which he knows to be incomplete or does not believe to be complete, shall be punishable with imprisonment which may extend to three months, or with fine, or with both.

51. Q: What are the conditions for the inspection of the Register of Firms and filed documents? A: The Register of Firms shall be open to inspection by any person on payment of such fee as may be prescribed. All statements, notices, and intimations filed under this Chapter shall also be open to inspection, subject to such conditions and on payment of such fee as may be prescribed.
52. Q: What is the rule regarding the grant of copies? A: The Registrar shall, on application, furnish to any person on payment of such fee as may be prescribed, a copy, certified under his hand, of any entry or portion thereof in the Register of Firms.
53. Q: What are the rules of evidence as per the Act? A: Any statement, intimation, or notice recorded or noted in the Register of Firms shall, as against any person by whom or on whose behalf such statement, intimation, or notice was signed, be conclusive proof of any fact therein stated. A certified copy of an entry relating to a firm in the Register of Firms may be produced in proof of the fact of the registration of such firm and of the contents of any statement, intimation, or notice recorded or noted therein.
54. Q: What are the requirements for public notice under the Act? A: A public notice under the Act is given by notice to the Registrar of Firms and by publication in the local official Gazette and in at least one vernacular newspaper circulating in the district where the firm has its place or principal place of business.
55. Q: What is the saving clause in the Act? A: Nothing in the Act or any repeal effected thereby shall affect or be deemed to affect any right, title, interest, obligation, or liability already acquired, accrued, or incurred before the commencement of this Act, any legal proceeding or remedy in respect of such right, title, interest, obligation, or liability, or anything done or suffered before the commencement of this Act.
56. Q: Who has the power to make rules under the Partnership Act, 1932? A: The Provincial Government may make rules prescribing the fees which shall accompany documents sent to the Registrar of Firms, the form of statements submitted under the Act, and other procedural aspects necessary for carrying out the purposes of the Chapter.
57. Q: Can a partnership firm continue to exist after the death of a partner? A: Yes, under a contract between the partners, the firm may not be dissolved by the death of a partner, and in such a case, the estate of the deceased partner is not liable for any act of the firm done after his death.
58. Q: What is the liability of partners in a partnership-at-will for acts done before notice of dissolution? A: In a partnership-at-will, partners continue to be liable for all acts of the firm done before notice of dissolution is given.
59. Q: What is the rule regarding minors in a partnership? A: Minors cannot be partners but can be admitted to the benefits of partnership with the consent of all the partners.
60. Q: What rights does a minor have upon being admitted to the benefits of partnership? A: A minor admitted to the benefits of partnership has the right to share in the property and profits of the firm as agreed upon and may have access to inspect and copy any of the accounts of the firm.
61. Q: What is the rule regarding the retirement of a partner in a partnership-at-will? A: In a partnership-at-will, a partner may retire by giving notice in writing to all the other partners of his intention to retire.
62. Q: How can changes in the constitution of a firm be recorded? A: Changes in the constitution of a registered firm must be notified to the Registrar, who will record the change in the Register of Firms.
63. Q: What is the effect of a partner’s insolvency on the firm? A: A partner ceases to be a partner on the date on which the order of adjudication is made if he is adjudicated insolvent, whether or not the firm is thereby dissolved.
64. Q: What is the effect of expulsion of a partner? A: A partner may be expelled by a majority of the partners if such power is conferred by contract between the partners, and the provisions relating to the retirement of a partner apply to an expelled partner.
65. Q: How can a partner be expelled from the firm? A: A partner can be expelled in the exercise of good faith of powers conferred by contract between the partners.
66. Q: What rights does an outgoing partner have to share in subsequent profits? A: An outgoing partner is entitled to such share of the profits made since he ceased to be a partner as may be attributable to the use of his share of the property of the firm or to interest at the rate of six percent per annum on the amount of his share in the property of the firm.
67. Q: What rights do partners have to the property of the firm? A: Subject to contract between the partners, the property of the firm includes all property and rights and interests in property originally brought into the stock of the firm, or acquired by purchase or otherwise by, or for, the firm, and includes the goodwill of the business.
68. Q: What happens to the property of the firm after dissolution? A: After dissolution, the property of the firm shall be held and used by the partners exclusively for the purposes of the business until the affairs of the firm are completely wound up.
69. Q: What is the rule regarding personal profits earned by partners? A: If a partner derives any profit for himself from any transaction of the firm or from the use of the property or business connection of the firm or the firm name, he shall account for that profit and pay it to the firm.
70. Q: What is the right of partners to have accounts after dissolution? A: On the dissolution of a firm, every partner or his representative is entitled to have the property of the firm applied in payment of the debts and liabilities of the firm and to have the surplus distributed among the partners or their representatives according to their rights.
71. Q: How can changes in the names and addresses of partners be noted? A: When any partner in a registered firm alters his name or permanent address, an intimation of the alteration may be sent by any partner or agent of the firm to the Registrar, who will note the change in the Register of Firms.
72. Q: What happens when a minor partner attains majority? A: A minor partner must give public notice within six months of attaining majority or of obtaining knowledge of his admission to the benefits of partnership, electing whether he will become a partner or not. Failure to give such notice results in the minor becoming a partner after the expiry of the said six months.
73. Q: What are the rights of a partner after the change in the constitution of a firm? A: The mutual rights and duties of the partners in a reconstituted firm remain the same as they were immediately before the change, as far as possible.
74. Q: Can a partner carry on any business other than that of the firm? A: Unless otherwise agreed, a partner shall not carry on any business other than that of the firm while he is a partner.
75. Q: What is the liability of a partner for wrongful acts? A: Where a loss or injury is caused to any third party by the wrongful act or omission of a partner acting in the ordinary course of the business of a firm, or with the authority of his partners, the firm is liable to the same extent as the partner.
76. Q: What is the rule regarding holding out in partnerships? A: If any person represents himself or knowingly permits himself to be represented as a partner in a firm, he is liable as a partner to anyone who has on the faith of such representation given credit to the firm.
77. Q: Can a partner mortgage his interest in the firm? A: Yes, a partner can mortgage his interest in the firm, but this does not entitle the mortgagee to interfere in the conduct of the business or to require accounts or inspect the books of the firm.
78. Q: What is the rule regarding the notice to acting partner? A: Notice to a partner who habitually acts in the business of the firm or any matter relating to the affairs of the firm operates as notice to the firm, except in cases of fraud on the firm committed by or with the consent of that partner.
79. Q: How can a partner retire from the firm? A: A partner may retire with the consent of all the other partners, in accordance with an express agreement by the partners, or where the partnership is at will, by giving notice in writing to all the other partners of his intention to retire.
80. Q: What is the effect of a continuing guarantee given to a firm? A: A continuing guarantee given to a firm, or to a third party in respect of the transactions of a firm, is revoked as to future transactions from the date of any change in the constitution of the firm.
81. Q: Can the property of the firm be used for personal purposes? A: No, subject to contract between the partners, the property of the firm shall be held and used by the partners exclusively for the purposes of the business.
82. Q: What is the effect of an admission made by a partner? A: An admission or representation made by a partner concerning the affairs of the firm is evidence against the firm, if it is made in the ordinary course of business.
83. Q: What happens to the goodwill of the firm after dissolution? A: In settling the accounts of a firm after dissolution, the goodwill shall be included in the assets and may be sold either separately or along with other property of the firm.
84. Q: What are the rules regarding the grant of copies of entries in the Register of Firms? A: The Registrar shall, on application, furnish to any person on payment of such fee as may be prescribed, a copy, certified under his hand, of any entry or portion thereof in the Register of Firms.
85. Q: What is the rule regarding the transfer of a partner’s interest in the firm? A: A transfer by a partner of his interest in the firm, either absolute or by mortgage or by the creation of a charge on such interest, does not entitle the transferee to interfere in the conduct of the business, require accounts, or inspect the books of the firm, but only to receive the share of profits of the transferring partner.
86. Q: What is the effect of the non-registration of a firm on its ability to sue? A: No suit to enforce a right arising from a contract or conferred by this Act shall be instituted in any Court by or on behalf of any person suing as a partner in a firm against the firm or any person alleged to be or to have been a partner in the firm unless the firm is registered and the person suing is or has been shown in the Register of Firms as a partner in the firm.
87. Q: Can a partner acquire immovable property on behalf of the firm? A: In the absence of any usage or custom of trade to the contrary, the implied authority of a partner does not empower him to acquire immovable property on behalf of the firm.
88. Q: What is the rule regarding the settlement of accounts between partners after dissolution? A: In settling the accounts of a firm after dissolution, the assets of the firm, including any sums contributed by the partners to make up deficiencies of capital, shall be applied in paying the debts of the firm to third parties, in paying to each partner ratably what is due to him for advances as distinguished from capital, in paying to each partner ratably what is due to him on account of capital, and the residue shall be divided among the partners in the proportions in which they were entitled to share profits.
89. Q: What happens when a partner withdraws money for personal use? A: If a partner derives any profit for himself from any transaction of the firm, or from the use of the property or business connection of the firm or the firm name, he shall account for that profit and pay it to the firm.
90. Q: What is the rule regarding the exclusion of a partner? A: A partner may not be expelled from a firm by any majority of the partners, except in the exercise of good faith of powers conferred by contract between the partners.
91. Q: What are the rules for recording changes in the constitution of a firm? A: When a change occurs in the constitution of a registered firm, any incoming, continuing, or outgoing partner must give notice to the Registrar of such change, specifying the date thereof, and the Registrar shall make a record of the notice in the entry relating to the firm in the Register of Firms.
92. Q: What is the liability of the firm for the wrongful acts of a partner? A: Where by the wrongful act or omission of a partner acting in the ordinary course of the business of a firm, or with the authority of his partners, loss or injury is caused to any third party, or any penalty is incurred, the firm is liable to the same extent as the partner.
93. Q: What happens when a minor partner elects to become a partner upon attaining majority? A: If a minor partner elects to become a partner, he becomes personally liable to third parties for all acts of the firm done since he was admitted to the benefits of partnership, and his share in the property and profits of the firm remains the same as it was when he was a minor.
94. Q: What are the duties of partners in relation to the conduct of the business? A: Every partner has the right to take part in the conduct of the business, must attend diligently to his duties in the conduct of the business, and must render true accounts and full information of all things affecting the firm to any partner or his legal representative.
95. Q: Can a partner be expelled without his consent? A: A partner can be expelled by a majority of the partners only in the exercise of good faith of powers conferred by contract between the partners.
96. Q: What happens if a partner is adjudicated insolvent? A: If a partner is adjudicated insolvent, he ceases to be a partner on the date of the order of adjudication, whether or not the firm is thereby dissolved.
97. Q: What is the rule regarding the dissolution of a firm by notice? A: In a partnership-at-will, the firm may be dissolved by any partner giving notice in writing to all the other partners of his intention to dissolve the firm.
98. Q: Can a partner withdraw a suit filed on behalf of the firm? A: In the absence of any usage or custom of trade to the contrary, the implied authority of a partner does not empower him to withdraw a suit or proceeding filed on behalf of the firm.
99. Q: What are the rules for recording changes in the names and addresses of partners? A: When any partner in a registered firm alters his name or permanent address, an intimation of the alteration may be sent by any partner or agent of the firm to the Registrar, who shall deal with it in the manner provided for noting the opening and closing of branches.
100. Q: What is the effect of non-registration on the rights of a partner to sue? A: No suit to enforce a right arising from a contract or conferred by this Act shall be instituted in any Court by or on behalf of any person suing as a partner in a firm against the firm or any person alleged to be or to have been a partner in the firm unless the firm is registered and the person suing is or has been shown in the Register of Firms as a partner in the firm.
101. Q: What is the effect of changes in the firm name or principal place of business on the registration? A: When an alteration is made in the firm name or in the location of the principal place of business of a registered firm, a statement must be sent to the Registrar specifying the alteration, and the Registrar shall amend the entry relating to the firm in the Register of Firms accordingly.
102. Q: Can a partner compromise or relinquish a claim by the firm? A: In the absence of any usage or custom of trade to the contrary, the implied authority of a partner does not empower him to compromise or relinquish any claim or portion of a claim by the firm.
103. Q: What is the rule regarding the use of the firm name after dissolution? A: After a firm is dissolved, every partner or his representative may restrain any other partner or his representative from carrying on a similar business in the firm name or from using any of the property of the firm for his own benefit, until the affairs of the firm have been completely wound up.
104. Q: Can a partner admit liability in a suit or proceeding against the firm? A: In the absence of any usage or custom of trade to the contrary, the implied authority of a partner does not empower him to admit any liability in a suit or proceeding against the firm.
105. Q: What is the rule regarding the extension and restriction of a partner’s implied authority? A: The partners in a firm may, by contract between the partners, extend or restrict the implied authority of any partner. Any act done by a partner on behalf of the firm which falls within his implied authority binds the firm unless the person with whom he is dealing knows of the restriction or does not know or believe him to be a partner.
106. Q: What happens when a minor partner elects not to become a partner upon attaining majority? A: If a minor partner elects not to become a partner, his share shall not be liable for any acts of the firm done after the date of the notice, and he shall be entitled to sue the partners for his share of the property and profits in accordance with the rules of the Act.
107. Q: What is the rule regarding the revocation of a continuing guarantee by change in the firm? A: A continuing guarantee given to a firm, or to a third party in respect of the transactions of a firm, is revoked as to future transactions from the date of any change in the constitution of the firm, unless there is an agreement to the contrary.
108. Q: Can a partner transfer immovable property belonging to the firm? A: In the absence of any usage or custom of trade to the contrary, the implied authority of a partner does not empower him to transfer immovable property belonging to the firm.
109. Q: What is the rule regarding the settlement of accounts upon the retirement of a partner? A: When a partner retires, the remaining partners must settle accounts with the retiring partner according to the terms of the partnership agreement or as per the rules laid down in the Act.
110. Q: What is the rule regarding the dissolution of a firm upon the happening of certain contingencies? A: Subject to contract between the partners, a firm is dissolved if constituted for a fixed term by the expiry of that term, if constituted to carry out one or more adventures or undertakings by the completion thereof, by the death of a partner, or by the adjudication of a partner as an insolvent.
111. Q: Can a partner submit a dispute relating to the business of the firm to arbitration? A: In the absence of any usage or custom of trade to the contrary, the implied authority of a partner does not empower him to submit a dispute relating to the business of the firm to arbitration.
112. Q: What is the liability of partners for acts done after the dissolution of a firm? A: Partners continue to be liable to third parties for any act done by any of them which would have been an act of the firm if done before the dissolution until public notice is given of the dissolution.
113. Q: What is the rule regarding the rights of transferees of a partner’s interest? A: A transfer by a partner of his interest in the firm, either absolute or by mortgage or by the creation of a charge on such interest, does not entitle the transferee, during the continuance of the firm, to interfere in the conduct of the business, require accounts, or inspect the books of the firm.
114. Q: Can a partner acquire immovable property on behalf of the firm? A: In the absence of any usage or custom of trade to the contrary, the implied authority of a partner does not empower him to acquire immovable property on behalf of the firm.
115. Q: What is the effect of an admission made by a partner? A: An admission or representation made by a partner concerning the affairs of the firm is evidence against the firm if it is made in the ordinary course of business.
116. Q: Can a partner carry on any business other than that of the firm? A: A partner shall not carry on any business other than that of the firm while he is a partner unless otherwise agreed.
117. Q: What happens when a partner is adjudicated insolvent? A: If a partner is adjudicated insolvent, he ceases to be a partner on the date on which the order of adjudication is made, whether or not the firm is thereby dissolved.
118. Q: Can a partner use the firm name after dissolution? A: After a firm is dissolved, a partner or his representative may restrain any other partner or his representative from carrying on a similar business in the firm name or from using any of the property of the firm for his own benefit until the affairs of the firm have been completely wound up.
119. Q: What is the liability of partners for acts done after dissolution? A: Partners continue to be liable to third parties for any act done by any of them which would have been an act of the firm if done before the dissolution until public notice is given of the dissolution.
120. Q: Can a partner compromise or relinquish any claim by the firm? A: In the absence of any usage or custom of trade to the contrary, the implied authority of a partner does not empower him to compromise or relinquish any claim or portion of a claim by the firm.
121. Q: What is the effect of non-registration of a firm? A: No suit to enforce a right arising from a contract or conferred by this Act shall be instituted in any Court by or on behalf of any person suing as a partner in a firm against the firm or any person alleged to be or to have been a partner in the firm unless the firm is registered and the person suing is or has been shown in the Register of Firms as a partner in the firm.
122. Q: Can a partner withdraw a suit or proceeding filed on behalf of the firm? A: In the absence of any usage or custom of trade to the contrary, the implied authority of a partner does not empower him to withdraw a suit or proceeding filed on behalf of the firm.
123. Q: What is the rule regarding the settlement of accounts between partners after dissolution? A: In settling the accounts of a firm after dissolution, the assets of the firm, including any sums contributed by the partners to make up deficiencies of capital, shall be applied in paying the debts of the firm to third parties, in paying to each partner ratably what is due to him for advances as distinguished from capital, in paying to each partner ratably what is due to him on account of capital, and the residue shall be divided among the partners in the proportions in which they were entitled to share profits.
124. Q: What is the effect of a partner’s insolvency on the partnership? A: A partner ceases to be a partner on the date on which the order of adjudication is made if he is adjudicated insolvent, whether or not the firm is thereby dissolved.
125. Q: Can a partner use the firm name for personal benefit? A: Subject to contract between the partners, the property of the firm, including the firm name, shall be held and used by the partners exclusively for the purposes of the business and not for personal benefit.
126. Q: What is the liability of a partner for acts of the firm? A: Every partner is liable, jointly with all the other partners and also severally, for all acts of the firm done while he is a partner.
127. Q: Can a partner admit liability in a suit or proceeding against the firm? A: In the absence of any usage or custom of trade to the contrary, the implied authority of a partner does not empower him to admit any liability in a suit or proceeding against the firm.
128. Q: What is the rule regarding the dissolution of a firm by agreement? A: A firm may be dissolved with the consent of all the partners or in accordance with a contract between the partners.
129. Q: What are the rules for recording changes in the names and addresses of partners? A: When any partner in a registered firm alters his name or permanent address, an intimation of the alteration may be sent by any partner or agent of the firm to the Registrar, who shall deal with it in the manner provided for noting the opening and closing of branches.
130. Q: What is the rule regarding the dissolution of a firm upon the happening of certain contingencies? A: Subject to contract between the partners, a firm is dissolved if constituted for a fixed term by the expiry of that term, if constituted to carry out one or more adventures or undertakings by the completion thereof, by the death of a partner, or by the adjudication of a partner as an insolvent.
131. Q: What happens to the property of the firm after dissolution? A: After dissolution, the property of the firm shall be held and used by the partners exclusively for the purposes of the business until the affairs of the firm are completely wound up.
132. Q: Can a partner compromise or relinquish any claim by the firm? A: In the absence of any usage or custom of trade to the contrary, the implied authority of a partner does not empower him to compromise or relinquish any claim or portion of a claim by the firm.
133. Q: What is the effect of the non-registration of a firm on its ability to sue? A: No suit to enforce a right arising from a contract or conferred by this Act shall be instituted in any Court by or on behalf of any person suing as a partner in a firm against the firm or any person alleged to be or to have been a partner in the firm unless the firm is registered and the person suing is or has been shown in the Register of Firms as a partner in the firm.
134. Q: What are the rights of a partner after the change in the constitution of a firm? A: The mutual rights and duties of the partners in a reconstituted firm remain the same as they were immediately before the change, as far as possible.
135. Q: Can a partner transfer immovable property belonging to the firm? A: In the absence of any usage or custom of trade to the contrary, the implied authority of a partner does not empower him to transfer immovable property belonging to the firm.
136. Q: What is the liability of the estate of a deceased partner? A: Where under a contract between the partners the firm is not dissolved by the death of a partner, the estate of a deceased partner is not liable for any act of the firm done after his death.
137. Q: Can a partner submit a dispute relating to the business of the firm to arbitration? A: In the absence of any usage or custom of trade to the contrary, the implied authority of a partner does not empower him to submit a dispute relating to the business of the firm to arbitration.
138. Q: What are the rights of an outgoing partner in certain cases to share subsequent profits? A: An outgoing partner is entitled to such share of the profits made since he ceased to be a partner as may be attributable to the use of his share of the property of the firm or to interest at the rate of six percent per annum on the amount of his share in the property of the firm.
139. Q: What is the rule regarding the extension and restriction of a partner’s implied authority? A: The partners in a firm may, by contract between the partners, extend or restrict the implied authority of any partner. Any act done by a partner on behalf of the firm which falls within his implied authority binds the firm unless the person with whom he is dealing knows of the restriction or does not know or believe him to be a partner.
140. Q: What is the effect of an admission made by a partner? A: An admission or representation made by a partner concerning the affairs of the firm is evidence against the firm if it is made in the ordinary course of business.
141. Q: What are the rules for recording changes in the constitution of a firm? A: When a change occurs in the constitution of a registered firm, any incoming, continuing, or outgoing partner must give notice to the Registrar of such change, specifying the date thereof, and the Registrar shall make a record of the notice in the entry relating to the firm in the Register of Firms.
142. Q: Can a partner withdraw a suit or proceeding filed on behalf of the firm? A: In the absence of any usage or custom of trade to the contrary, the implied authority of a partner does not empower him to withdraw a suit or proceeding filed on behalf of the firm.
143. Q: What is the rule regarding the revocation of a continuing guarantee by change in the firm? A: A continuing guarantee given to a firm, or to a third party in respect of the transactions of a firm, is revoked as to future transactions from the date of any change in the constitution of the firm, unless there is an agreement to the contrary.
144. Q: Can a partner mortgage his interest in the firm? A: Yes, a partner can mortgage his interest in the firm, but this does not entitle the mortgagee to interfere in the conduct of the business or to require accounts or inspect the books of the firm.
145. Q: What is the rule regarding the dissolution of a firm by agreement? A: A firm may be dissolved with the consent of all the partners or in accordance with a contract between the partners.
146. Q: What is the effect of a partner’s insolvency on the partnership? A: A partner ceases to be a partner on the date on which the order of adjudication is made if he is adjudicated insolvent, whether or not the firm is thereby dissolved.
147. Q: Can a partner use the firm name after dissolution? A: After a firm is dissolved, a partner or his representative may restrain any other partner or his representative from carrying on a similar business in the firm name or from using any of the property of the firm for his own benefit until the affairs of the firm have been completely wound up.
148. Q: What happens when a minor partner elects to become a partner upon attaining majority? A: If a minor partner elects to become a partner, he becomes personally liable to third parties for all acts of the firm done since he was admitted to the benefits of partnership, and his share in the property and profits of the firm remains the same as it was when he was a minor.
149. Q: What is the liability of the firm for the wrongful acts of a partner? A: Where by the wrongful act or omission of a partner acting in the ordinary course of the business of a firm, or with the authority of his partners, loss or injury is caused to any third party, or any penalty is incurred, the firm is liable to the same extent as the partner.
150. Q: What is the effect of the non-registration of a firm on its ability to sue? A: No suit to enforce a right arising from a contract or conferred by this Act shall be instituted in any Court by or on behalf of any person suing as a partner in a firm against the firm or any person alleged to be or to have been a partner in the firm unless the firm is registered and the person suing is or has been shown in the Register of Firms as a partner in the firm.
151. Q: What is the rule regarding the rights of transferees of a partner’s interest? A: A transfer by a partner of his interest in the firm, either absolute or by mortgage or by the creation of a charge on such interest, does not entitle the transferee to interfere in the conduct of the business, require accounts, or inspect the books of the firm.
152. Q: What is the rule regarding the extension and restriction of a partner’s implied authority? A: The partners in a firm may, by contract between the partners, extend or restrict the implied authority of any partner. Any act done by a partner on behalf of the firm which falls within his implied authority binds the firm unless the person with whom he is dealing knows of the restriction or does not know or believe him to be a partner.
153. Q: Can a partner submit a dispute relating to the business of the firm to arbitration? A: In the absence of any usage or custom of trade to the contrary, the implied authority of a partner does not empower him to submit a dispute relating to the business of the firm to arbitration.
154. Q: What are the rules for recording changes in the names and addresses of partners? A: When any partner in a registered firm alters his name or permanent address, an intimation of the alteration may be sent by any partner or agent of the firm to the Registrar, who shall deal with it in the manner provided for noting the opening and closing of branches.
155. Q: What is the effect of an admission made by a partner? A: An admission or representation made by a partner concerning the affairs of the firm is evidence against the firm if it is made in the ordinary course of business.
156. Q: What happens when a minor partner elects not to become a partner upon attaining majority? A: If a minor partner elects not to become a partner, his share shall not be liable for any acts of the firm done after the date of the notice, and he shall be entitled to sue the partners for his share of the property and profits in accordance with the rules of the Act.
157. Q: What is the effect of non-registration on the rights of a partner to sue? A: No suit to enforce a right arising from a contract or conferred by this Act shall be instituted in any Court by or on behalf of any person suing as a partner in a firm against the firm or any person alleged to be or to have been a partner in the firm unless the firm is registered and the person suing is or has been shown in the Register of Firms as a partner in the firm.
158. Q: What is the rule regarding the revocation of a continuing guarantee by change in the firm? A: A continuing guarantee given to a firm, or to a third party in respect of the transactions of a firm, is revoked as to future transactions from the date of any change in the constitution of the firm, unless there is an agreement to the contrary.
159. Q: What is the rule regarding the dissolution of a firm by agreement? A: A firm may be dissolved with the consent of all the partners or in accordance with a contract between the partners.
160. Q: What is the liability of the estate of a deceased partner? A: Where under a contract between the partners the firm is not dissolved by the death of a partner, the estate of a deceased partner is not liable for any act of the firm done after his death.
161. Q: Can a partner acquire immovable property on behalf of the firm? A: In the absence of any usage or custom of trade to the contrary, the implied authority of a partner does not empower him to acquire immovable property on behalf of the firm.
162. Q: What is the rule regarding the settlement of accounts upon the retirement of a partner? A: When a partner retires, the remaining partners must settle accounts with the retiring partner according to the terms of the partnership agreement or as per the rules laid down in the Act.
163. Q: Can a partner use the firm name for personal benefit? A: Subject to contract between the partners, the property of the firm, including the firm name, shall be held and used by the partners exclusively for the purposes of the business and not for personal benefit.
164. Q: What is the liability of a partner for acts of the firm? A: Every partner is liable, jointly with all the other partners and also severally, for all acts of the firm done while he is a partner.
165. Q: What are the rights of a partner after the change in the constitution of a firm? A: The mutual rights and duties of the partners in a reconstituted firm remain the same as they were immediately before the change, as far as possible.
166. Q: Can a partner compromise or relinquish any claim by the firm? A: In the absence of any usage or custom of trade to the contrary, the implied authority of a partner does not empower him to compromise or relinquish any claim or portion of a claim by the firm.
167. Q: What is the effect of the non-registration of a firm on its ability to sue? A: No suit to enforce a right arising from a contract or conferred by this Act shall be instituted in any Court by or on behalf of any person suing as a partner in a firm against the firm or any person alleged to be or to have been a partner in the firm unless the firm is registered and the person suing is or has been shown in the Register of Firms as a partner in the firm.
168. Q: What is the rule regarding the rights of transferees of a partner’s interest? A: A transfer by a partner of his interest in the firm, either absolute or by mortgage or by the creation of a charge on such interest, does not entitle the transferee to interfere in the conduct of the business, require accounts, or inspect the books of the firm.
169. Q: What is the effect of non-registration on the rights of a partner to sue? A: No suit to enforce a right arising from a contract or conferred by this Act shall be instituted in any Court by or on behalf of any person suing as a partner in a firm against the firm or any person alleged to be or to have been a partner in the firm unless the firm is registered and the person suing is or has been shown in the Register of Firms as a partner in the firm.
170. Q: Can a partner transfer immovable property belonging to the firm? A: In the absence of any usage or custom of trade to the contrary, the implied authority of a partner does not empower him to transfer immovable property belonging to the firm.
171. Q: What is the rule regarding the extension and restriction of a partner’s implied authority? A: The partners in a firm may, by contract between the partners, extend or restrict the implied authority of any partner. Any act done by a partner on behalf of the firm which falls within his implied authority binds the firm unless the person with whom he is dealing knows of the restriction or does not know or believe him to be a partner.
172. Q: Can a partner mortgage his interest in the firm? A: Yes, a partner can mortgage his interest in the firm, but this does not entitle the mortgagee to interfere in the conduct of the business or to require accounts or inspect the books of the firm.
173. Q: What is the rule regarding the settlement of accounts between partners after dissolution? A: In settling the accounts of a firm after dissolution, the assets of the firm, including any sums contributed by the partners to make up deficiencies of capital, shall be applied in paying the debts of the firm to third parties, in paying to each partner ratably what is due to him for advances as distinguished from capital, in paying to each partner ratably what is due to him on account of capital, and the residue shall be divided among the partners in the proportions in which they were entitled to share profits.
174. Q: Can a partner withdraw a suit or proceeding filed on behalf of the firm? A: In the absence of any usage or custom of trade to the contrary, the implied authority of a partner does not empower him to withdraw a suit or proceeding filed on behalf of the firm.
175. Q: What are the duties of partners in relation to the conduct of the business? A: Every partner has the right to take part in the conduct of the business, must attend diligently to his duties in the conduct of the business, and must render true accounts and full information of all things affecting the firm to any partner or his legal representative.
176. Q: Can a partner admit liability in a suit or proceeding against the firm? A: In the absence of any usage or custom of trade to the contrary, the implied authority of a partner does not empower him to admit any liability in a suit or proceeding against the firm.
177. Q: What is the effect of non-registration of a firm on its ability to sue? A: No suit to enforce a right arising from a contract or conferred by this Act shall be instituted in any Court by or on behalf of any person suing as a partner in a firm against the firm or any person alleged to be or to have been a partner in the firm unless the firm is registered and the person suing is or has been shown in the Register of Firms as a partner in the firm.
178. Q: What is the rule regarding the dissolution of a firm by agreement? A: A firm may be dissolved with the consent of all the partners or in accordance with a contract between the partners.
179. Q: What happens to the property of the firm after dissolution? A: After dissolution, the property of the firm shall be held and used by the partners exclusively for the purposes of the business until the affairs of the firm are completely wound up.
180. Q: What are the rights of a partner after the change in the constitution of a firm? A: The mutual rights and duties of the partners in a reconstituted firm remain the same as they were immediately before the change, as far as possible.
181. Q: What is the liability of partners for acts done after the dissolution of a firm? A: Partners continue to be liable to third parties for any act done by any of them which would have been an act of the firm if done before the dissolution until public notice is given of the dissolution.
182. Q: Can a partner submit a dispute relating to the business of the firm to arbitration? A: In the absence of any usage or custom of trade to the contrary, the implied authority of a partner does not empower him to submit a dispute relating to the business of the firm to arbitration.
183. Q: What is the effect of an admission made by a partner? A: An admission or representation made by a partner concerning the affairs of the firm is evidence against the firm if it is made in the ordinary course of business.
184. Q: Can a partner compromise or relinquish any claim by the firm? A: In the absence of any usage or custom of trade to the contrary, the implied authority of a partner does not empower him to compromise or relinquish any claim or portion of a claim by the firm.
185. Q: What is the rule regarding the extension and restriction of a partner’s implied authority? A: The partners in a firm may, by contract between the partners, extend or restrict the implied authority of any partner. Any act done by a partner on behalf of the firm which falls within his implied authority binds the firm unless the person with whom he is dealing knows of the restriction or does not know or believe him to be a partner.