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Unit 10: Law of Partnership Act

2. No consideration is required to create partnership. A partnership is an extension of agency Notes
for which no consideration is necessary.
3. The partnership agreement may be express (i.e., oral or writing) or implied and the
latter may be inferred from the conduct or the course of dealings of the parties or from
the circumstances of the case. However, it is always advisable to have the partnership
agreement in writing.
4. An alien friend can enter into partnership, an alien enemy cannot.
5. A person of unsound mind is not competent to enter into a partnership.

6. A company, incorporated under the Companies Act, 1956 can enter into a contract of
partnership.

10.1.2 Duration of Partnership

The duration of partnership may or may not be fixed. It may be constituted even for a particular

adventure.
10.1.3 Partnership at Will

In accordance with Sec. 7, a partnership is called a partnership at will where; (i) it is not

constituted for a fixed period of time and (ii) there is no provision made as to the determination
of partnership in any other way. Therefore such a partnership has no fixed or definite date of

termination. Accordingly death or retirement of a partner does not affect the continuance of such
a partnership.
10.1.4 Particular Partnership

In accordance with Sec. 8 a particular partnership is one which is formed for a particular
adventure or a particular undertaking. Such a partnership is usually dissolved on the completion
of the adventure or undertaking.
10.1.5 Limited Partnership

In this type of partnership, the liability of certain partners is limited to the amount of capital
which they have agreed to contribute to the business. In a limited partnership, there will be at
least one general partner whose liability is unlimited and one or more special partners whose
liability is limited.

10.2 Registration of Firms (Secs.58-59)

10.2.1 Application for Registration

Sec.58 lays down the procedure for registration of partnership firms. A partnership firm may be

registered at any time by post, or delivering to the Registrar of Firms 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: (i) the firm’s name, (ii) the place or the

principal place of business of the firm, (iii) the names of any other places where the fi rm carries

on business, (iv) the date when each partner joined the firm, (v) the names in full and addresses

of the partners and (vi) the duration of the firm. The statement must be signed by all the partners,
or by their agents especially authorised in that behalf and duly verifi ed. When the Registrar of
Firms is satisfied that the provisions of Sec.58 have been duly complied with, he registers the

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