OMTEX – CLASSES

THE HOME OF TEXT

S.Y.B.Com BUSINESS LAW
nd
II term portion
Marks
1. Companies Act 1956 (Sir) 15

2. The Indian Partnership Act 1932 (Teacher) 12

3. The Maharashtra Co-operative Society Act 1960 (Teacher) 13

4. Consumer Protection Act 1986 (Sir) 10

• The Indian Partnership Act 1932

Nature of Partnership registration.
1. Define Partnership & Explain its essential features/
Characteristics
2. Discuss the tests to determine the existence of partnership
3. Distinguish between_
• Partnership firm V/S Co – ownership
• Partnership firm V/S Joint Hindu Family
• Partnership firm V/S Joint Stock Companies.
4. a. Explain procedure for registration of firm. What are effect/
consequences of Non – registration?
b. What are the exception to Non – registration.
5. i. Write short Notes on Property of the firm & Good will.
ii. Types of Partnership.
6. Test to determine Partnership.

OMTEX -–CLASSES
“THE HOME OF TEXT”

1. Ans.
1
 Sec. 4 of Indian Partnership Act 1932 defines_

“Partnership is the relation between persons who have agreed to share the
profits of the business carried on by all or any one of them acting for them”

The following are the 5 essential elements/ characteristics of Partnership.

1. Association of persons_
a. The term persons for purposes of Sec 4. includes a natural person of individual
competent to contract. Thus a minor persons of unsound mind are disqualified
being incompetent to contract. Similarly, a partnership firm is not deemed to be
a person in the eyes of law.
Duli chand V/S CIT (Commission of Income Tax)
1956 Supreme Court

b. Minimum / Maximum Number:- As per section 4 there shall be minimum 2

persons and Maximum 20 persons in case of an ordinary business and 10 incase
of a banking business. If the partnership exceeds the above maximum limit in
the absence of registration it is termed as an illegal association under section 11
of Companies Act 1956.

2. Agreement_
a. Contract: - Partnership brings in to existence essentially out of an agreement
and not from status or successions. Hence Section 5 lays down, “That
Partnership arises from a Contract & not from Status”
Thus Members of J.H.F (Joint Hindu Family) i.e. Co – Parceners are not
partners. Because their relation arises not from contract but from inheritance.

b. Essential elements of a valid contract: - As partnership arises out of an

agreement it must fulfill all the essential elements of a valid contract under
section 10 of Indian Contract Act.

c. Oral / Written: - A partnership agreement may be either verbal or in written or

may even be implied from the conduct of the parties.

Laxmi Bai V/S Roshan Lal (1972)

Such Partnership agreement may be for fixed period or for a particular venture
or a partnership at will.