Partnership Act 1961 Case Study

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QUESTION 2
The relations between partners to one another are determined by their partnership agreement. The partnership agreement normally provides for the rights and duties of the partners, the conduct and management of the firm, the capital and their profit-sharing arrangement. The Partnership Act 1961 applies in the absence of provisions being made under the agreement. Discuss.

The definition for Partnership are when two or more individuals join together to form business. Each person will contribute money, labor or skill, and other resources and expects to share the profits and losses of the business.In the compliance to form a partnership there must be, a consent and consideration, parties must be competent to be a partner, it can be created by a formal deed or a written agreement or even orally, also there must be a lawful purpose.
Apart from that,partnership can be formed without a written agreement, but the rights and obligations will be determine by the state law …show more content…

“Persons who have entered into partnership with one another are called a firm”. In section 7 of the Partnership Act 1961, “Every partner have the power to bind the firm since they are the agent of the firm, unless the partner has no authority to act for the firm and the person with whom he is dealing either knows that he has no authority or does not believe him to be a partner”("Partnership Act," 1961). Partners are also bound by the acts on behalf of firm. In the Partnership Act 1961, Section 11 stated that “every partner in a firm is liable with the other partners for all debts and obligations of the firm incurred while he is a partner”("Partnership Act," 1961). The partner are not allowed to compete with the firm. If a partner, without the permission of the other partners, carries on any business in the same field as a competitor of the firm, he must give the firm all the profit made by him in the business. This is based on Section 32 of the

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