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CHAPTER
I |
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NATURE
AND DEFINITIONS |
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• |
Historical
Background |
1 |
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CHAPTER
II |
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DEFINITION
OF PARTNERSHIP |
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Q. |
What
is the meaning of the partnership according to section 4 of Partnership
Act,
1932? State with Examples. |
3 |
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• |
Partners,
Firm, Firm Name – Section 4 |
3 |
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• |
Essentials
of Partnership |
4
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Q. |
What
are the essentials to constitute partnership firm? Explain with relevant
examples and cas laws. |
4 |
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A. |
Agreement |
4 |
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Persons
Capable of becoming Partners |
6 |
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H.U.F
as a Partner |
6 |
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Q. |
What
in the status of H.U.F. under Partnership Act? |
6 |
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Joint
Venture Agreements
|
6 |
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Company
as Partner
|
7 |
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Section
5—Partnership not created by status
|
7 |
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Q. |
Whether
a company can be formed by status? |
7 |
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B. |
Business |
7
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|
Q. |
What
is the meaning of Business and what activities are included in the term
‘Business ’? |
7 |
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C. |
Sharing
of Profits |
9 |
|
Q. |
Sharing
of profit is an essential element of the partnership firm. Discuss it |
9 |
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D. |
Mutual
Agency |
10 |
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Q. |
Discuss
the principle laid down in Cox v. Hickman. |
10 |
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Number
of Persons |
11 |
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Whether
a Firm a Legal Entity |
11 |
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Q. |
Partnership
firm is not a distinct legal entity what are the reasons. |
11 |
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Kinds
of Partners |
11 |
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Q. |
Discuss
the various types of partners in the partnership firm. |
12 |
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Partnership
and Company Distinguished
|
12 |
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Q. |
Discuss
the features which distinguish partnership and company. |
12 |
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Partnership
and Co-owners Distinguished
|
14 |
|
Q. |
Distinguish
the partnership firm with co-owners. |
14 |
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Partnership
and Joint Family Distinguished
|
15 |
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Q. |
Define
the features which distinguish partnership from joint family. |
15 |
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Partnership
and Service Distinguished
|
16 |
|
Q. |
What
is the difference between partnership and service? |
16 |
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Partnership
and Trade Association Distinguished
|
16 |
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Section
6: Mode of Determining Existence of Partnership |
16
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Q. |
What
are the modes which determine the existence of partnership explain with
the help of case laws and examples? |
16 |
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Q. |
Whether
sharing of losses is included in the sharing of profits? |
18 |
|
Q. |
What
is the status of person in the partnership firm who lends money to firm? |
18 |
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Section
7: Partnership at Will |
21
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Q. |
In
which situations, a partnership is at Will. What are the essentials. Prove
them with case law |
21 |
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Section
8 Particular Partnership |
22 |
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Q. |
Define
particular partnership. |
22 |
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Duration
of Partnership |
23 |
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Meaning
& Nature of Firm |
23 |
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Firm
Name |
24 |
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Partner
in a Representative Capacity |
24 |
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Partnership
Firm as a Tenderer |
24 |
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Status
of Partnership Firm under the Tax Laws |
25 |
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Q. |
Discuss
the status of firm under the taxing statute. |
25 |
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Suits
against Partnership Firm |
25 |
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Illegal
partnership |
25 |
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Q. |
What
are the grounds with which a partnership firm is presumed to be illegal? |
25
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CHAPTER
III |
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RELATION
OF PARTNERs TO ONE ANOTHER
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• |
(Sections
9-17 and Section 25) |
26
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• |
“Duties
of Partner” |
27
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1 |
General
Duties of Partners – Section 9 |
27
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Q. |
Discuss
in brief the duties of the partner. |
27
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|
Q. |
What
are the general duties of partners defined in section 9? |
27
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2 |
Duty
to Indemnify for loss caused by fraud – Section 10 |
28
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3 |
Determination
of Rights and Duties of Partners by Contract between the Partners
– Section 11 |
28
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Q. |
By
whom, the mutual right and duties are determined. |
28
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Q. |
Explain
the principle defined in Pabitra Construction Co. case. |
29
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Q. |
Discuss
critically agreement in restraint of trade what are the duties of partners
while conducting the business of the firm. |
30
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4 |
Duty
Relating to Conduct of Business – Section 12(b) |
31
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5 |
Duty
to indemnify the firm for any loss caused to it by his wilful conduct –
Section 13(f) |
31
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6 |
Duty
in respect of personal profits earned by partners – Section 16(a) |
32
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Q. |
What
is the remedy given to partners if personal profit is earned by anyone of
the
partners? Discuss with the help of case-laws. |
34
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7 |
Duty
not to compete with the business of the firm – Section 16(b) of
Partnership Act provides |
34
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8 |
Duty
in respect of Application of the Property of the Firm according to Section
15 |
35
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9 |
Duty
to contribute equally to the losses – Section 13(b) |
35
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10 |
Duty
to properly use of firm’s property – Sections 14, 15 |
35
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Q. |
Discuss
the obligation of a partner if he uses firm’s property for personal use. |
35
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• |
Rights
of Partners |
36
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Q. |
Discuss
in brief the rights of the partners in the firm. |
36
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1 |
Right
to take part in business – Section 12(a) |
36
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2 |
Majority
Rights – Section 12(c) |
37
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|
Q. |
When
there is a need to take the majority decisions? |
37
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Q. |
What
is the principle laid down in case Const v. Haris? |
37
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3 |
Right
to have access to books of the firm – Section 12(d) |
37
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4 |
Right
to profits – Section 13(b) |
38
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Q. |
Explain
the maxim actus curiae neminem gravabit |
39
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Applicability of the Doctrine of
actus curiae neminem gravabit
|
39
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5 |
Right
to receive interest on the capital subscribed |
39
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6 |
Right
to indemnity in respect of payment made and liabilities incurred –
Section 13(e) |
39
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|
Q. |
Whether
a partner shall be indemnified in respect of payment made or liabilities incurred
by him. |
40
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Q. |
What
are the facts of the case Thomas v. Atherton. |
40
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7 |
Right
to receive remuneration |
40
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Q. |
Discuss
the right of a partner to receive remuneration. |
40
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8 |
Majority
Rights – Section 12(c) |
41
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Effect
of change in the firm or its business – Section 17 |
41
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Section
17 – Subject to Contract between the Partners |
41
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Q. |
Discuss
in brief the changes in the firm and effects thereof.
|
41
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Problems |
42
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|
Q. |
What
are the rights and duties of partners after change in the constitution of
firm. |
42
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Where
Business Continued by Surviving Partners |
42
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|
Q. |
In
what circumstances a business can be continued by surviving partners. |
42
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Partnership
Property |
43
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Q. |
Define
partnership property with the help of relevant case laws. |
43
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Section
14 – Property of the Firm |
43
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Q. |
Define
the three types of partnership property as per section 14. |
45
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|
Q. |
Discuss
the facts of the case law Broadway Centre v. Gopaldas Bagri. |
47
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Test
for determining whether a particular property is separate property of the
partner |
48
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Q. |
What
is the test to determine separate property. |
48
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Q. |
Define
the facts of Burnell v. Hunt. |
49
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Test
to Distinguish Separate Property from Partnership Property |
49
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Section
25 Liability of a Partner for Acts of the Firm |
49
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Q. |
What
liability is defined under section 25. |
49
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CHAPTER
IV
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RELATIONS
OF PARTNERS TO THIRD PARTIES
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Section
18: Partner to be Agent of the Firm |
50
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|
Q. |
Whether
a partner is agent of the firm or not. |
50
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Section
25: Liability of a Partner for Acts of the Firm |
51
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|
Q. |
Define
the joint and several liability of partners. |
51
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According
to section 25 |
52
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Section
19: Implied Authority of Partner as Agent of the Firm |
53
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|
Q. |
Define
the implied authority of partner of the firm. |
53
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Q. |
Define
the case-law in relevancy with the section 26. |
54
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Section
22: Mode of doing act to bind firm |
56
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|
Q. |
What
are the modes which bind the partnership firm. |
56
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Section
20: Extension and Restriction of Partner’s Implied Authority |
57
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Q. |
To
what extent there is a restriction on partner’s implied authority. |
57
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Section
21: Partner’s Authority in an Emergency |
58
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Section
23: Admission made by a Partner |
59
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Q. |
What
is the effect if an admission is made by partner? |
59
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Section
24: Effect of Notice to Acting Partner |
60
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Q. |
What
are the requirements for notice to a partner. |
60
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Section
25: Liability of a Partner for acts of the Firm |
60
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|
Q. |
Define
in brief section 25. |
60
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Section
26: Liability of the Firm for Wrongful acts of a Partner |
61
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|
Q. |
Whether
a firm is liable for wrongful acts of partner done in the ordinary course
of business. |
61
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• |
Torts
of a Partner |
62
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|
Q. |
Whether
a firm is vicariously liable for the acts of partner. |
62
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Section
27: Liability of Firm for Misapplication by Partners |
63
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|
Q. |
What
is the liability of firm for misapplication of property by partners? |
63
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Section
28: Holding out |
64
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|
Q. |
Define
Holding out with the help of examples and case-laws. |
64
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Liability
for holding out
|
65
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|
Q. |
Explain
the essentials elements of holding out. |
66
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|
Q. |
Define
the case law Beaven v. National Bank Ltd. |
66
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Principle
of Holding out and the Retired Partner
|
67
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|
Q. |
Discuss
the principles of Scarf v. Jardin. |
67
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Exception
to the principle of holding out
|
68
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|
Q. |
Explain
the exception to the principle of holding out. |
68
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• |
Transferee
of Partner’s Interest (Section 29) |
68
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Section
29: Rights of Transferee of a Partner’s Interest |
68
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|
Q. |
Briefly
lay down the principle explained in section 29. |
69
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Section
30: Minors Admitted to the Benefits of Partnership |
70
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|
Q. |
Whether
minor can be admitted to the benefits of partnership. |
70
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|
Section
30: Of the Act Deals with the Rights, Liabilities and Disabilities of a
Minor in the Partnership |
71
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|
Q. |
Explain
with case-laws the rights, liabilities and disabilities of a minor. |
71
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Minor’s
Admission to the Benefits of Partnership |
72
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Minor’s
Position During Minority |
72
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Right
of election to become or not to become a partner by a minor after he becomes a major |
72
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Sharing
of Losses |
73
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Agreement
with Minor |
73
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CHAPTER
V
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INCOMING
AND OUTGOING PARTNERS
|
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|
Section
31: Introduction of a Partner |
74
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|
Q. |
Explain
the procedure how a partner is introduced as a partner in the firm. |
74
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|
Modes
of Introduction of a Partner |
75
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|
Q. |
Explain
the modes to introduce a partner in a firm. |
75
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|
1
|
Introduction
of Partners by Agreement
|
75
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2.
|
Introduction
in accordance with a contract between the parties
|
75
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|
Q. |
Explain
the facts of Byrne v. Reid. |
75
|
|
|
Section
32: Retirement of a Partner |
76
|
|
Q. |
What
are the modes of retirement of a partner from the firm? |
76
|
|
|
An
outgoing partner or retirement of a partner
|
77
|
|
|
Retirement
of partner
|
77
|
|
Q. |
Define
Retirement. |
77
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|
|
How
can a partner retire
|
77
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|
Section
7 Partnership at Will
|
77
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Section
33: By Expulsion |
78
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|
Section
34: Insolvency of a Partner |
79
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|
Q. |
Insolvency
is one of the grounds to cease a person as partner in a firm. Explain. |
79
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|
Insolvency
of a partner
|
79
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|
|
Dissolution
on Insolvency
|
79
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|
Q. |
How
a firm to be dissolved on insolvency and what are the effects? |
79
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|
|
Effect
of Insolvency of a Partner
|
79
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Section
35: Liability of Estate of Deceased Partner |
79
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|
Section
36: Rights of outgoing partner to carry on competing business |
80
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|
Q. |
What
are the restrictions on the outgoing partner to carry on the competing
business? |
80
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|
|
Agreement
in restraint of trade
|
80
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|
|
Rights
of outgoing partners to carry on competing business
|
80
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|
|
Essentials
|
80
|
|
Q. |
Explain
the facts of Espley v. Williams. |
81
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|
Section
37: Right of outgoing partner in certain cases to share subsequent profits |
81
|
|
Q. |
Whether
a outgoing partner is entitled to share subsequent profits. |
81
|
|
Q. |
Explain
the facts of Barclays Bank Trust Co. Ltd. v. Bluff. |
82
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|
|
Section
38: Revocation of continuing guarantee by change in firm |
83
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|
Effect
of change
|
83
|
|
Q. |
What
is continuing guarantee and how can it be revoked by firm? |
83
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|
|
Continuing
Guarantee
|
83
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CHAPTER
VI
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DISSOLUTION
OF A FIRM
|
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|
Section
39: Dissolution of a Firm |
85
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|
Q. |
Define
“Dissolution of firm”. |
85
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|
|
Dissolution
and Reconstitution
|
85
|
|
Q. |
What
principle is laid down in case of Commissioner of Income-tax v. Pigat
Champan. |
85
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|
|
Nature
of binding
|
86
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|
Section
40: Dissolution by agreement |
86
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|
Dissolution
by Agreement
|
86
|
|
Q. |
Define
the dissolution by Agreement. |
86
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|
|
Dissolution
of old firm
|
87
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|
|
Cessation
of business
|
87
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|
Stopping
of main business
|
87
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|
|
Section
41: Compulsory Dissolution |
88
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|
|
Conditions
for dissolution
|
88
|
|
Q. |
What
are the conditions and methods for compulsory dissolution. |
88
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|
|
Effect
of Insolvency
|
88
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|
Section
42: Dissolution on the happening of certain contingencies |
89
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|
Q. |
What
are the contingencies which happen to dissolution of firm. |
89
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|
(1)
|
Fixed
term
|
89
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|
(2)
|
On
completion of adventures or undertakings
|
89
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|
(3)
|
By
death of a partner
|
90
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|
(4)
|
Insolvency
of Partner
|
91
|
|
Q. |
When
there is a partnership at Will it dissolves by notice explain! |
91
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|
|
Section
43: Dissolution by Notice of Partnership at Will |
91
|
|
(1) |
Notice
|
91
|
|
(2) |
Dissolution
at Will
|
91
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|
(3)
|
Dissolution
by notice
|
92
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|
(4) |
Notice
must be reasonable
|
92
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|
|
Section
44: Dissolution by the court |
93
|
|
Q. |
Explain
the grounds on which the court may dissolve the firm. |
93
|
|
(a)
|
A
partner becoming of unsound mind
|
94
|
|
(b)
|
A
partner becoming permanently incapable
|
94
|
|
(c)
|
Partner
guilty of conduct
|
94
|
|
(d)
|
Wilful
or persistence breach of agreement
|
94
|
|
(e)
|
Transfer
of interest
|
94
|
|
(f)
|
Perpetual
loss
|
94
|
|
(g)
|
Just
and equitable
|
94
|
|
|
Section
45: Liability for acts of partners done after dissolution |
95
|
|
Q. |
Whether
a partner is liable for acts done after dissolution. |
95
|
|
|
Share
in the partnership assets
|
95
|
|
|
Section
46: Rights of partners to have business wound-up after dissolution |
95
|
|
Q. |
What
is the procedure to wind-up the firm after dissolution? |
95
|
|
|
Section
47: Continuing authority of partners for purpose of winding-up |
96
|
|
Q. |
The
partners are in the continuing authority in a firm even after dissolution
explain! |
96
|
|
|
Section
48: Mode of Settlement of accounts between partners |
96
|
|
Q. |
What
are the methods in settling the accounts of firm after dissolution? |
96
|
|
|
Section
49: Payment of firm debts and of separate debts |
97
|
|
|
Section
50: Personal profits earned after dissolution |
97
|
|
Q. |
Define
section 50 |
97
|
|
|
Section
51: Return of premium on premature dissolution |
97
|
|
|
Section
52: Rights where partnership contract is rescinded for fraud or
misrepresentation |
98
|
|
|
Section
53: Right to restrain from use of firm name or firm property |
98
|
|
Q. |
Explain
the restriction laid down in section 53 of Partnership Act. |
98
|
|
|
Section
54: Agreement of restraint of trade |
98
|
|
|
Section
55: Sale of Goodwill after Dissolution |
98
|
|
(1)
|
Right
of buyer and seller of goodwill
|
98
|
|
Q. |
What
are the rights of buyer and seller of goodwill? |
98
|
|
(2)
|
Agreement
in restraint of trade
|
99
|
|
|
Goodwill:
Sale after dissolution
|
99
|
|
|
Rights
of partners as to goodwill
|
99
|
|
|
Goodwill
does not survive
|
99
|
|
|
Rights
of partners to restrain use of partnership name
|
100
|
|
|
Dissolution
under trading with the enemy legislation
|
100
|
|
|
CHAPTER
VII
|
|
|
|
REGISTRATION OF FIRMS
|
|
|
|
Section
56: Power to exempt from application to this chapter |
101
|
|
|
Section
57: Appointment of Registrars |
101
|
|
Q. |
Explain
the appointment of Registrars. |
101
|
|
|
Section
58: Application for Registration |
101
|
|
Q. |
What
are the points which need to be mentioned in application for Registration. |
101
|
|
|
Section
59: Registration |
102
|
|
Q. |
Define
section 59 |
102
|
|
|
Section
60: Recording of alteration in firm name and principal place of business |
102
|
|
|
Section
61: Noting of closing and opening of branches |
103
|
|
|
Section
62: Noting of changes in name and addresses of partners |
103
|
|
|
Section
63: Recording of changes on dissolution of a firm |
103
|
|
|
Recording
of withdrawal of a minor
|
104
|
|
|
Section
64: Rectification of mistakes |
104
|
|
|
Section
65: Amendment of Register by order of court |
104
|
|
|
Section
66: Inspection of register and filed documents |
104
|
|
|
Section
67: Grant of Copies |
105
|
|
|
Section
68: Rules of evidence |
105
|
|
|
Section
69: Effect of non-Registration |
105
|
|
Q. |
What
are the consequences of the non-registration of firm? |
105
|
|
|
Effects
of non-registration |
107
|
|
(1) |
Suits
between partners and firm – Sub-section (1)
|
107
|
|
Q. |
If
a firm is not registered whether a suit can be instituted by or against
the firm? |
107
|
|
(2)
|
Suit
only by an authorised person
|
108
|
|
(3)
|
Suits
between firm and third parties section 69(2)
|
109
|
|
|
Problems
|
109
|
|
|
Rights
arising from a contract |
111
|
|
Q. |
What
are the rights which arise only from a contract? |
111
|
|
|
No.
3 Bar to claim of set-off and other proceedings |
111
|
|
Q. |
Whether
section 69 is also applicable on set-off or counter-claim. |
111
|
|
Q. |
What
are the exceptions of section 69? |
112
|
|
(1)
|
Suit
for dissolution—section 69(3)(a)
|
112
|
|
(2)
|
Suit
on behalf of an insolvent partner section 69(3)(b)
|
113
|
|
(3)
|
Suit
where provisions relating to registration of firms do not apply [section
69(4)(a)]
|
113
|
|
(4)
|
When
value of the suit does not exceed Rs 100 (section 69(4)(b)
|
113
|
|
|
Suit
filed in Individual Capacity
|
113
|
|
|
Registration
Subsequent to the filing of the suit |
113
|
|
|
Criminal
proceedings |
113
|
|
|
Section
70: Penalty for furnishing false particulars |
113
|
|
Q. |
What
penalty is imposed for furnishing false particulars? |
113
|
|
|
Section
71: Power to make rules |
114
|
|
Q. |
Define
the law-making powers of State Government. |
114
|
|
|
CHAPTER
VIII |
|
|
|
SUPPLEMENTAL |
|
|
|
Section
72: Mode of giving public Notice |
115 |
|
|
Section
73: Repeals |
115 |
|
|
Section
74: Savings |
116
|
|
•
|
Table of cases
|
116
|
