BOOK 3

The Law of Partnership

Chapter 1

The Nature of
Partnership

The Essential Element of a

Partnership

Definition and characteristics

According to partnership act- 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.

1.

Voluntary Agreement
Sharing of Profits of a Business
Mutual Agency

2.
3.

Who can be partner

Person
Minor
Person of unsound mind
Woman
Company
An alien enemy

Topic

Partnership forbidden by law

Number of partners:

More than 10 persons for business of banking

More than 20 persons for other business
A company must be formed if the number of
partners is more than 10 and 20 for banking and
other business respectively.

An agreement to form partnership for the

purpose of carrying illegal trade or prohibited
trade, is void.

Topic

Some definition

Firm, firm-name, partner

The legal status of a firm
Classes of partner

Active partner
Dormant, sleeping or nominal partner
Sub-partner

Name of partnership

Topic

Some definition

Classes of partnerships

Partnership-at-will
Particular Partnership- joint venture
Limited partnership

Partnership property
Goodwill
The partnership agreement

Topic

Registration of firms

Registration is not compulsory but necessary.

Formalities for registration

Time for registration: firm can be registered at
any time.
Consequences of non-registration:

Cannot file a suit for enforcing rights

Unregistered firm cannot file suit against any third
party
Cannot claim a set-off in a suit

Topic

Consequences of non-registration (exception of

the rules):

Can file a suit for the dissolution of the firm and for
accounts
Can file suit for the realisation of the properties of
dissolved firm
Receiver can realise properties of an insolvant partner
of unregistered firm
Can claim set-off for sum not exceeding tk 100 in
value

Chapter 2

Right and Liabilities of

Partner

Topic

Determination of right and duties of partners by

contract between the partner.
Two general rules regarding the conduct of the
partners to one another.

General duties of partners

Indemnity

The authority of a partner

Agency
Express authority
Implied authority

Limitation of a partners implied authority

Topic

The authority of a partner

Alteration of authority
Authority in an emergency

Liability of partners to outsiders

Liability of a partner for act of firm,

Liability of the firm for wrongful acts of a partner
Liability of the firm for misapplication by partners

Topic

Rights of partners:

Conduct of business
Can express opinion
Access, inspection, copy
Equality of profits
Interest of capital
Interest on advance
To get indemnity

Topic

Rights of partners:

Application of property of firm

Partners authority
Reconstitution
Dissolution
Right to carrying on a competing business
Right to share profits after retirement

Duties of partners

Justice, faithfulness, true accounts , full information

To pay indemnity
To attend diligently
No remuneration

Topic

Duties of partners

Equality of losses
To pay indemnify for wilful neglect
No private benefit
To account of secret profit
No secret profit
Unlimited liability

Chapter 3

Dissolution of Firms

Topic

What is dissolution
The grounds of dissolution

By agreement
Compulsory dissolution
On the happening of certain contingencies
By notice

Topic

The grounds of dissolution

Dissolution by the court

Insanity
Permanent incapacity
Guilty conduct
Persistent breach of contract
Transfer of whole interest
Loss
Just and equitable clause