Page 162 - DMGT407Corporate and Business Laws

Unit 6: Partnership Act and Limited Liability Act

(ii) To express his opinion on any matter, but in case of difference of opinion regarding Notes
ordinary matters of the business, he is bound by the majority decision. However, no
change can be made in the nature of the business without the consent of all the partners
[s.12(c)].
(iii) To have access to and inspect and copy any of the books of the firm [s.12 (d)].

(iv) To share equally in the profits [s.13 (b)].
(v) To rank as a joint owner of the property of the firm. The property of the firm includes all
property and rights and interest in property originally brought into stock of the firm, or
acquired by purchase or otherwise, by or for the firm or for the purposes and in the course
of the business of the firm and includes also the goodwill of the business.

(vi) To do, in an emergency, all such acts as are reasonably necessary to protect the firm from
loss.
(vii) To claim interest @ 6 per cent per annum on any amount advanced by him beyond the
amount of capital that he agreed to subscribe [s.13(c)].
(viii) To be indemnified by the firm in respect of liabilities incurred by him in the ordinary
course of business [s.13 (e)].
(ix) 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 [s.33 (i)].
(x) To resist the introduction of a new partner. No new partner can be introduced into the firm
unless all the partners consent thereto [s.31 (1)].
(xi) To seek retirement from the firm. A partner may retire (i) with the consent of all other
partners, or (ii) in accordance with an express agreement by the partners, or (iii) where the
partnership is at will, by giving notice in writing to all the partners of his intention to
retire [s.32 (1)].

(xii) To carry on a competing business after he leaves the firm. Every outgoing partner has a
right to carry on a competing business, but, without using the firm’s name or soliciting the
firm’s customers or in any way representing himself as carrying on the business of the
firm, unless he has been restrained by reasonable agreement from carrying on a similar
business for a specified period of time within specified local limits [s.36 (1)].
(xiii) To share subsequent profits as an outgoing partner. Where any partner in a firm has died
or otherwise ceased to be a partner and the surviving or continuing partners carry on the
business of the firm with the property of the firm, without any final settlement of accounts,
as between them and the outgoing partner or his estate, then, in the absence of a contract
to the contrary, the outgoing partner or his estate is entitled, at the option of himself or his
representatives, to such share of the profits made since he ceased to be a partner as may be
attributable to the use of his share of the property of the firm, or interest @ 6 per cent per
annum on that share from the date on which it ought to have been paid up, to the date of
payment, whichever is later (s.37).

6.4.2 Duties of Partners

Section 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 (s.10). (iii) To attend diligently to his duties in the

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