Reviewed and Validated by: Naman, Associate
The Rights and duties of partners with each other and with respect to the firm are divided into two categories-
Categories of Rights and Duties
Mandatory
Subject to the agreement among partners
The mandatory right & duties cannot be changed or contracted out by agreement between the partners. Following are the mandatory duties & reciprocal rights of a partner:
- To carry on the greatest common advantages (S.9)
- To be just & faithful (S.9)
- To render true accounts and full information (S.9)
- To indemnify (S.10)
- Right to take part in the conduct of business [S.12(a)]
- Right to express opinion [S.12(c)]
- Right to have access to books of the firm. [S.12(d)]
- Right to share profits [S.13(b)]
- Right to interest on capital and advances [S.13(c) & (d)]
- Right to indemnity [S.13(e)
Read another article: Valid Contracts
Duties of Partners
- Duty to carry on the business to the greatest common advantage [S.9]
- Duty to be just and faithful to each other [S.9]
- Duty to render true accounts [S.9]
- Duty to render full information of all things affecting the firm [S.9]
- Duty to indemnify for fraud [S.10]
- Duty to be diligent [S.12(b) & S.13(f)]
- Duty to properly use the firm’s property [S.14 & S.15]
- Duty not to earn personal profits or to compete [S.16]
Liability of a Partner with regards to third party
- Liability for the acts done within the authority of a partner (S.18-22)
- Liability when a partner acts in emergency (S.21)
- Liability on ratification of a partners act
- Liability for admission made by a partner (S.23)
- Liability on notice to an acting partner (S.24)
- Liability for torts & wrongful acts (S.26)
- Liability for misapplication of money or property (S.27)
Test to determine the scope of implied authority
- The act should be done in relation to the partnership business and,
- The act should be done in usual way, in relation to the business of the kind carried on by the firm.
- Nature of the business is thus a relevant factor
- Law of agency –notice to agent = notice to principal
- If a fraud has been committed on the firm by or with the consent of a particular partner, notice to such a partner regarding that matter is not deemed to be a notice to the firm.
- A principal is vicariously liable for the torts & wrongful acts committed by his agent, since every partner is the agent of the firm, same principal is applicable & recognised by the Indian Partnership Act.
