An outgoing partner may carry on a business competing with that of the firm, but cannot use the firm name, represent himself as carrying on the business of the firm, or solicit the customers of the partnership firm.
It means that they are not necessarily partners; for example, joint owners sharing returns from a property do not become partners.
A minor can become a partner for the benefits of the partnership with the consent of all partners, and an agreement must be executed through his guardian.
If a minor elects to become a partner, his rights and liabilities will be similar to those of a full-fledged partner, and he will be personally liable for acts of the firm since his admission.
The seller may enter into competition with the purchaser unless a valid restraint clause in the contract of sale prevents it.
Losses are paid first out of undistributed profits, then out of capital, and lastly by partners individually in the profit-sharing ratio, with assets applied to pay outside creditors, repay advances, repay capital, and divide any remaining amount.
A minor has the right to share profits, share property, inspect accounts, and take copies of accounts, but is not personally liable.
A firm is dissolved if constituted for a fixed term by the expiry of that term, by the completion of one or more adventures, by the death of a partner, or by the adjudication of a partner as insolvent.
The liability of partners continues until public notice of dissolution is given and remains for all things necessary for winding up the business, allowing partners to complete unfinished transactions.
The registration requires a statement containing the name of the firm, place of business, names of other business locations, date when each partner joined, full names and permanent addresses of partners, and the duration of the firm.
Consequences include that a partner cannot sue the partnership firm for claims, the firm cannot sue third parties for debts arising from contracts, and no partner can file a suit against other partners. However, third parties can file suits against the firm to enforce their rights.
Libel or slander against a firm means a libel or slander of its partners, and any partner or individual may file the suit.
A new partner who pays a premium to enter an existing firm is entitled to demand a return of a proportion of the premium upon dissolution if the partnership was for a fixed term and dissolved early, except in cases of agreement, misconduct, or death of a partner.
In a partnership at will, any partner may dissolve the firm by giving written notice to all other partners, effective from the date mentioned in the notice or from the date of communication if no date is mentioned.
If a partner is insolvent and cannot contribute to the deficiency, solvent partners will only contribute their share of the deficiency in cash, and available assets will be distributed among them in proportion to their capital.
Suits that can be filed include a suit for dissolution of a firm, rendering of accounts of a dissolved firm, realization of property of a dissolved firm, claims of set-off not exceeding one hundred rupees, and realization of property of an insolvent partner.
The buyer has the right to represent himself in continuing the business, use the firm name, and solicit former customers, while restricting the seller from doing so.
Upon attaining majority, the minor may give public notice within six months to elect to become a partner or not; failure to do so results in automatic partnership.
When goodwill is sold, its value is divided among the partners in the same manner as they share profits and losses.
The authority of the partners continues even after dissolution as long as necessary to wind up the business, allowing each partner to have an equitable lien over the firm’s assets to pay debts and receive amounts due.
A firm is dissolved if all the partners or all but one partner are insolvent, or by the happening of any event that makes the business unlawful.
The court may direct dissolution if a partner has become of unsound mind, is permanently incapable of performing duties, is guilty of conduct affecting business, commits persistent breaches of agreements, or transfers their interest in the firm.
A firm is merely a collection of partners and cannot bring a suit for libel or slander; such actions must be taken by the partners themselves.
A firm may be dissolved with the consent of all partners or in accordance with a contract between the parties.
If a minor does not elect to become a partner, his rights and liabilities remain those of a minor, and he can sue for his share of the property.
The outgoing partner is entitled to either a share of the profits made since he ceased to be a partner or to interest at 6% per annum on the amount of his share in the property of the firm.
