PARTNERSHIP LAW

Definitions Act of a firm, Business, Prescribed, and Third Party. Partnership Relation between persons agree to share the profit or loss Partners Firm No of partner 2 but not more than 20 in Ordinary business Not more than 10 in case of banking company Features/Essentials of Partnership Agreement Number of partners Business Profit motive Conduct of business Unlimited liability Investment Transfer of share Types of Partnership Partnership at will Particular Partnership Partnership for a fixed time

Registration of Partnership Firm Name of Firm Principal Place of business of the firm Name of sub office Nature of Business Duration of Firm Name/Address/other Particulars of the partners Date of Joining of each Partner of the firm Process Signature and Verification of prescribed form Prescribed fee and submission of form Entry of Registration Change in the form Partnership Agreement Name of Firm, Nature of business, Location, List of Partners, Duration of Partnership, Date of Commencement, Total Capital, Ratio of Profit, Amount of Drawing, Amount of Salary, Division of work, Head Office and Branches, Bank, Audit of account, Rules of admission and Withdrawal, Right and duty of Each Partner, Arbitration, Witnesses. Advantages Legal advantages Can file suit Protection of Rights Protection of Property Protection to Creditors General Advantages Govt. Facilities Public Confidence/ Reputation Credit Facilities Legal Protection

Rights and Liabilities of The Partners Duties of the partner Perform the True Services - Compensation for loss Sincere and careful - Work without Remuneration Work for Best Advantages - Distribution of loss Provide all types of Information - Keep Secrecy Undue Advantages - Return the Profit to firm Rights of Partner Right of Consultation Receive of Profit Participation in the Management Inspection of Accounts Right of Compensation - Right to Exercise Powers Introduction of New Partner Continuation Retirement- Liability of incoming partner Liability of Retiring / Deceased Partner Minor As A Partner Rights of Minor Share in the Business Have access to inspect the account Option to become Partner Become Major Liabilities Minor Share is liable not personally Give a notice to public when attaining age of majority After attaining majority he may be liable Partnership becoming Illegal Alien enemy Amendment of Act License withdrawn

Partnership distinguish from Private Company Control under partnership act 1932 Control under companies ordinance 1984 Maximum member 20--Maximum member 50 Two classes of member ordinary partner limited liability partner One class share holder with limited liability Audit no restriction Audit is compulsory Meeting no compulsion Must be held May change the business by mutual consent Mention in the memo of association except the sanction of the court Not required to submit the document to registrar Article of association and memo of association must be submitted Partnership vs. Co-Ownership Agreement is not essential arisen by operation of law Must have agreement Minor can become regular Co-Owner Restriction for minor to become a regular partner No limit for members

Not more than 20 Co-Owner can transfer his share Cant Co-Owner is not an agent of another Co-Owner Partner is the agent of other partner A Co-Owner can demand division of property Partner cant but only share of profit Partnership vs Company Control under partnership act 1932 Control under Companies Ordinance 1984 Restriction for transferring of shares No restrictions Maximum number 20 No limit No subscription of shares and debentures Subscription of shares and debentures As same as private company Implied Authority of Partnership Draw cheques in the name of firm Adjust and settle the accounts

Enter into all contracts Engager servants and agents Recover debts Sell the goods Purchase the goods Restrictions Open a bank account on his own name Withdraw a suit Admit any liability in a suit Acquire immovable property Transfer immovable property In Emergency Can do everything Dissolution of Partnership Ways of dissolution 1-Dissolution by agreement with the consent of all partners 2-Compulsory dissolution By the insolvency of partners By business becoming illegal 3-Contingent dissolution Completion of venture Expiry of time

Death of partner Retirement of partner 4-Dissolution by partner 5-Dissolution by court Breach of contract Unsound mind Incapacity of partner Misconduct of partner Transfer of interest Rights and obligations of partners after dissolution of partnership Public notice Notice to the registrar Publish in the newspaper Partner cant be assume as an agent after dissolution Partner will not bind the firm or another partner Exception Partner dies Partner retired Reconstitution of firm Introduction of a new partner Retirement of a partner Death of a partner Transfer of share