Mid Term Exam (Re-take)

Ans to the question no. 1

In all the above cases the third essential element of the partnership is absent. A creditor or an
employee or the widow and children of deceased partner cannot bind the firm by any act done
on behalf of the firm. Only those who have the authority to bind the firm by the reaction can
be called partners. Thus, the most important test of partnership is agency and authority.

The test of a true partnership was first laid by the House of Lords in the case of Cox v.
Hickman. In that case, a debtor transferred his business to trustees with instructions to carry
on the business and use the profits for paying his creditors. It was held that the creditors were
not partners of the business. Section 6 of the Partnership Act is a comprehensive statement of
the rule laid down in this case.

Ans to the question no. 2

The agreement to carry on business I partnership may be oral or in writing. If it is in writing,

the document in which the terms are incorporated is called Deed of Partnership or the
Articles of Partnership.

Written documents of partnership usually contain exhaustive provisions regarding matters

concerning the businesses and the relationship between partners. The following matters are
generally included;

name and address of the partners, firm name, nature of the business, place of business and the
address of the business, duration of the partnership and the mode of dissolution, the amount
of capital to be contributed by each partner, the share of profit to be taken by each partner, the
mode of management, the powers of the partner, terms on which a partner can retire, the
expulsion of partners and introduction of new partners, etc.

Ans to the question no. 3

Minor admitted as a partner according to section 30. A minor cannot enter into a contract of
p[partnership because an agreement by minor is void. But if all the partners agree, a minor
may be admitted to the benefit of an existing firm. The right and liabilities of such minor
partner are governed by the following rules
A minor cannot be a partner but in an existing partnership, a minor can be admitted into a
firm if all the partners of the firm agreed. Such minor gets al all the benefits of the
partnership. After attaching the majority

1. The minor has a right to such share of the property and of the profit of the firm as may be
agreed upon by the partners.

2. The minor may have access to an inspect and copy any of the accounts of the firm

3. The share of the minor in the profit and into his assets of the firm ate liable for the acts of
the firm but the minor is not personally liable for any such act

4. So long as the minor continues to be a member of the firm, he cannot file a suit against the
other partners for an account or for the payment of his share of the property or the profit of
the firm. In section 48 of the act for taking account of dissolved of partnership.

5. At any time within 6 months of his attaining majority, or of his obtaining knowledge that
he had been admitted to the benefit of the partnership, whichever date is later, the minor may
give public notice that he has elected become or that he's elected not to become of a firm.

A minor cannot be a partner but in an existing partnership, a minor can be admitted into a
firm if all the partners of the firm agreed. Such minor gets al all the benefits of the
partnership. After attaching the majority

Ans to the question no. 4

According to section 32, the retirement of a partner

A new partner may retire:

1. with the consent of the other entire partner

2. According the terms of the agreement of the partnership, or

3. Where the partnership is at will, by giving notice in writing to all the other partner of his
intentioned retire

A retired partner maybe discharged availability to any third party for acts of the firm done
before his retirement if it is so agreed with the third party and the partners of the reconstituted
firm. Such agreement may be implied from the course of relying on between the firm and the
third party after he had knowledge of the retirement.

The third partner continues to remain liable to third parties or acts of the firm until public
notice is given of the retirement. Such notice may be given either by the retired partner or by
any member of the reconstituted firm.

The mode of given public notice is laid down section72n of the act.

A retired partner is not liable for the debts of the firm incurred after public notice e of his
retirement.