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Unit 10: Law of Partnership Act

3. To have access to and inspect and copy any of the books of the fi rm [Sec.12(d)]. Notes

4. To share equally in the profi ts [Sec.13(b)].
5. To rank as a joint owner of the property of the fi rm.
6. To do, in an emergency, all such acts as are reasonably necessary to protect the fi rm from
loss.

7. To claim interest @ 6 per cent per annum on any amount advanced by him beyond the
amount of capital that he agreed to subscribe [Sec.13(c)].

8. To be indemnified by the firm in respect of liabilities incurred by him in the ordinary course
of business [Sec.13 (e)].
9. To continue in the partnership, i.e., not to be expelled. A partner may, however, be expelled

if a power to expel is conferred upon the partners and power is exercised bona fide by a
majority of partners [Sec.33 (i)].

10.4.2 Duties of Partners

Sec.9 provides for general duties of partners. (i) They are bound to (a) carry on the business of the
firm to the greatest common advantage, (b) to be just and faithful to each other and (c) to render

true accounts and full information of all things affecting the firm to any partner or his legal
representative. (ii) Every partner shall indemnify the firm for loss caused to it by his fraud in the

conduct of the business of the firm (Sec.10). (iii) To attend diligently to his duties in the conduct
of the firm’s business without any remuneration [Sec.13(a)]. (iv) If restrained by an agreement

with other partners, a partner has a duty not to carry on any business other than that of the

firm while he is a partner [Sec.11 (2)]. (v) If a partner carries on any business competing with
that of the firm, he shall account for and pay to the firm all profits made by him in that business

[Sec.16(b)].
10.5 Relations of Partners to Third Parties
Subject to Sec.18 every partner is the agent of the firm for the purposes of the business of the

fi rm.
10.5.1 Implied Authority of a Partner

A partner’s authority may be express or implied. It is express, when it is fixed between the partners

by mutual agreement. The agreement may, however, be oral or written. It is implied when the
law impliedly gives certain powers to a partner, i.e., the law presumes that every partner has the
power to do certain acts unless negative by an express agreement.

Secs.19 and 22 deal with the subject of implied authority of a partner.
10.5.2 Liabilities of a Partner

Liability of a partner stems from not complying with his duties under the Partnership Act. Thus,
in view of Sec.9, a partner shall be liable for (i) not carrying on the business of the firm to the

greatest common advantage; (ii) not being just and faithful to other partners and (iii) failure to
render true accounts and full information of all things affecting the firm to any partner or his

legal representative.

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