Formation, Deed, Registration OF PARTNERSHIP

CHAPTER-6 (PARTNERSHIP)

1. FORMATION OF PARTNERSHIP

2. Partnership Act prescribes no mode of forming a partnership . It is formed through a contractual relation between two or more persons , mutual trust and good faith . The act does not require the agreement to be in writing.

3. In the absence of such an agreement, the rights and duties of partners are determined by the Partnership Act, 1932

4. PARTNERSHIP DEED

5. . Document containing terms & conditions of a partnership It is an agreement in writing signed by all the partners , duly stamped and registered . It defines rights , duties and obligations of partners and governs relations among them in the conduct of business affairs of the firm firm.

6. The deed must not contain any term, which is contrary to the provisions of the partnership act.

7. CONTENTS : Name of the firm & nature of business. The principal place of business. Names and addresses of partners . Amount of capital to be contributed by each partner. Amount, which can be drawn by each partner. Profit sharing ratio. Rate of interest, if any on capital and drawings.

8. Procedure for admission, retirement, etc of a partner. Procedure for maintaining accounts and getting them audited. Loans and advances by partners and rate of interest payable on them.

9. REGISTRATION OF PARTNERSHIP

10. Registration of partnership is not compulsory under law . The act provides that , if the partners so desire they may register the firm , with the Registrar of Firms of the state in which the principal office of the firm is situated .

11. PROCEDURE

12. Filing of Application Form Name of the firm Principal place of business Other places of firm’s business Names & addresses of partners Date of joining by each partner Duration of partnership (if any)

13. Signing of application form and verification by each partner Submission of the Form along with Registration fee to the Registrar Scrutiny by the Registrar, verifying that all legal formalities have been complied with Entry in the Register of firms

14. Issue of Certificate of Registration by the Registrar Any change in the information submitted at the time of registration , should be conveyed to the Registrar.

15. CONSEQUENCES OF NON-REGISTRATION

16. LIMITATIONS : Cannot enforce claims against a third party Cannot file suit against any of the partners Partners cannot file suit against the firm A partner cannot file a suit against other partners

17. Following rights shall remain in force : Sue for dissolution of the firm or for accounts of a dissolved firm or power to realise the property of a dissolved firm Power of an official assignee, to realise the property of an insolvent partner Right of a third party to sue the firm or its partners

18. Right to sue a third party for infringement of a patent right