CHAPTER 11 Flashcards
What is partnership?
Partnership is a relation between persons who agreed to share profits of business carried on by all or any of them acting for all.
Essentials of partnership.
- Agreement between partners.
2.Association of two or more persons.
3.Agreement to carry on business.
4.Sharing of profit.
5.Mutual agency.
6.No seprate legal status.
7.Unlimited liability.
Explain sharing of profit is a prima facie evidence of partnership, not a conclusive evidence of partnership,how?
Usually sharing of profit indicates that partnership exists, but in following cases profit is shared with person but he does not become partner.
1.a LENDER who lent his money to the business (e.g bank)
2.an EMPLOYEE / AGENT who receives share of profit as remuneration (e. g royalty)
3. a RETIRED PARTNER , or a WIDOW or CHILD of deceased partner who receives an annuity
4. a PREVIOUS OWNWER of business , who receives share as consideration of sale of goodwill or business.
5.a MINOR who is admitted to the benefits of partnership.
6. a TRANSFREE of partner’s interest
Particular Partnership
*For a particular project or period.
*Dissolved on expiry.
*If continued after expiry, it becomes ‘partnership at
Partnership at will
Duration not specified.
Dissolved when a partner gives notice (wef specified date).
If dissolution with consent of all, it will not be ‘partnership
