Relation of Partners to One Another

Question 1

Mutual rights of partners

Answer 1

1- Right to take part in conduct of business

2- Right to be consulted

3- Right of access to books or accounts

4- Right to share profits equally

5- Right to receive interest on capital
(Only if agreed and firm earn profit)

6- Right to receive interest on advance
(@ 6% or as agreed , whether profit or loss)

7- Right to be indemnified

8- Right to retire
Public notice (partnership at will)
Consent of all partners (particular partnership)

9- Right of outgoing partner
(until his account is settle)
(Interest @ 6% on capital , or proportionate share in profit)

10- Variation in partnership (with Consent)
- To change nature of business
- To change constitution
- To change profit/loss sharing ratio

11- Right of partner after change in firm
- Change in constitution of firm , firm created for a fixed term
- Additional ventures or undertaking

Question 2

Mutual duties
(Absolute / mandatory duties)
(Imposed by law , cannot modified)

Answer 2

1- Duty to be liable jointly and severally (i.e unlimited liability)

2- Duty to act within authority

3- Duty in case of emergency

4- Duty to carry on Business to great common advantage

5- Duty to be just and faithful

6- Duty to provide true accounts

7- Duty to provide full information

8- Duty to indemnify for fraud

Question 3

Mutual duties
(Qualified duties)
(Changed through agreement)

Answer 3

1- Duty to use firms property exclusively for firm (if use by partner , return benefits)

2- Duty not to engage in competing business
(Can do any other business)
(Cannot do similar / competing business)

3- Duty not to assign / transfer his interest (except with consent of all partner)

4- Duty to contribute to the losses

5- Duty to indemnify for willful neglect

6- Duty to perform diligently his duties
(Except sleeping partner)

7- Duty to work without remuneration

Question 4

Property of firm

Answer 4

1- “property” or “interest/right in property” originally brought into the common stock of firm

2- “property” or “interest/rights in property” purchased by firm or for firm

3- Goodwill

(Any property purchased with partnership money unless contrary intention appear)