Quiz 32: Partnerships

Business

Case: A, J, and G made a partnership to drill a cesspool for two. J and G sent a letter to A after two months to dissolve the partnership. The partner A sued that the firm still continued but A was removed from the partnership. Relevant provision: According to UPA (Uniform Partnership Act), partnership is the association of two or more persons to carry on as co-owners a business for profit whether or not they intend to form a partnership. In determining the partnership, the Court considers the following: • The organization must intend to make profit. • Agreement to sharing of profits and losses among the partners. • Management of business. • Oral or written agreement. If there is any change in the partnership terms then it must be amended. Conclusion: In this case, the agreement showed that the partnership was made for two years. But after two months they removed A from the partnership. Hence, A can sue the other partners. The partnership was made for a fix term. It cannot be dissolved before two years unless court gives any notice. A was removed before two years but other partners continued hence he can walk to court.

According to UPA (Uniform Partnership Act), partnership is the association of two or more persons to carry on as co-owners a business for profit whether or not they intend to form a partnership. In determining the partnership, the Court considers the following: • The organization must intend to make profit. • Agreement to sharing of profits and losses among the partners. • Management of business. • Oral or written agreement. Unless the partnership agreement states otherwise the partners should follow the following: • Share profits and losses equally or according to the ratio mentioned in agreement. • Partners are not entitled to any payment beyond their share in profits, even if they work for the benefit partnership. • Partners have no right to use or sell specific partnership property except for the benefit of partnership. • They have equal right in the management. In this case, W re-recorded the songs and distributed through daily newspaper. W has violated the rules: • First of all, the property was given for the copyright and the time period of copyright has not lapsed so the partnership firm cannot resale it. • W re-recorded the songs and sold without the consent of L. Partner has no right to use or sell specific partnership property except for the benefit of partnership. So, W has violated the rules of partnership. • W has not sold it for the benefit of partnership but he sold it for his own benefit. Hence, W has violated partnership agreement.

According to UPA (Uniform Partnership Act), partnership is the association of two or more persons to carry on as co-owners a business for profit whether or not they intend to form a partnership. In determining the partnership, the Court considers the following: • The organization must intend to make profit. • Agreement to sharing of profits and losses among the partners. • Management of business. • Oral or written agreement. Agreement to share ownership is the essential feature of partnership. Intention of conducting a business for profit is a must for partnership. Intention of creating a relationship recognized as a partnership is also important feature. Hence options b, c and d are wrong. Hence, option (a) is not correct. Execution of a written partnership agreement.

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