Partnership Act 1890

Sections (47)

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• § 1 — Definition of partnership

  1.—(1) Partnership is the relation which subsists between persons carrying on a business in common with a view of profit.(2) But the relation between members of any company or association which is —(a) registered as a company under the Companies Act 1967 or under any previous corresponding law; or

• § 10 — Liability of firm for wrongs

  10. Where, by any wrongful act or omission of any partner acting in the ordinary course of the business of the firm, or with the authority of his co‑partners, loss or injury is caused to any person not being a partner in the firm, or any penalty is incurred, the firm is liable therefor to the same e

• § 11 — Misapplication of money or property received for or in custody of firm

  11. In the following cases:(a) where one partner acting within the scope of his apparent authority receives the money or property of a third person and misapplies it; and (b) where a firm in the course of its business receives money or property of a third person, and the money or property so receiv

• § 12 — Liability for wrongs joint and several

  12. Every partner is liable jointly with his co-partners and also severally for everything for which the firm while he is a partner therein becomes liable under section 10 or 11.

• § 13 — Improper employment of trust property for partnership purposes

  13. If a partner, being a trustee, improperly employs trust property in the business or on the account of the partnership, no other partner is liable for the trust property to the persons beneficially interested therein:Provided that — (a) this section shall not affect any liability incurred by any

• § 14 — Persons liable by “holding out”

  14. Every one who by words spoken or written or by conduct represents himself, or who knowingly suffers himself to be represented, as a partner in a particular firm, is liable as a partner to any one who has on the faith of any such representation given credit to the firm, whether the representation

• § 15 — Admissions and representations of partners

  15. An admission or representation made by any partner concerning the partnership affairs, and in the ordinary course of its business, is evidence against the firm.

• § 16 — Notice to acting partner to be notice to firm

  16. Notice to any partner who habitually acts in the partnership business of any matter relating to partnership affairs operates as notice to the firm, except in the case of a fraud on the firm committed by or with the consent of that partner.

• § 17 — Liabilities of incoming and outgoing partners

  17.—(1) A person who is admitted as a partner into an existing firm does not thereby become liable to the creditors of the firm for anything done before he became a partner.(2) A partner who retires from a firm does not thereby cease to be liable for partnership debts or obligations incurred before

• § 18 — Revocation of continuing guaranty by change in firm

  18. A continuing guaranty or cautionary obligation given either to a firm or to a third person in respect of the transactions of a firm is, in the absence of agreement to the contrary, revoked as to future transactions by any change in the constitution of the firm to which, or of the firm in respect

• § 19 — Variation by consent of terms of partnership

  19. The mutual rights and duties of partners, whether ascertained by agreement or defined by this Act, may be varied by the consent of all the partners, and such consent may be either express or inferred from a course of dealing.

• § 2 — Rules for determining existence of partnership

  2. In determining whether a partnership does or does not exist, regard shall be had to the following rules:(a) joint tenancy, tenancy in common, joint property, common property, or part ownership does not of itself create a partnership as to anything so held or owned, whether the tenants or owners d

• § 20 — Partnership property

  20.—(1) All property and rights and interests in property originally brought into the partnership stock or acquired, whether by purchase or otherwise, on account of the firm, or for the purposes and in the course of the partnership business, are called in this Act partnership property, and must be h

• § 21 — Property bought with partnership money

  21. Unless the contrary intention appears, property bought with money belonging to the firm is deemed to have been bought on account of the firm.

• § 22 — Conversion into personal estate of land held as partnership property

  22. Where land or any interest therein has become partnership property, it shall, unless the contrary intention appears, be treated as between the partners (including the representatives of a deceased partner), and also as between the heirs of a deceased partner and his executors or administrators,

• § 23 — Procedure against partnership property for partner’s separate judgment debt

  23.—(1) An enforcement order shall not issue against any partnership property except on a judgment against the firm.[Act 25 of 2021 wef 01/04/2022] (2) The General Division of the High Court or a District Court may, on the application by summons of any judgment creditor of a partner, make an order c

• § 24 — Rules as to interests and duties of partners subject to special agreement

  24. The interests of partners in the partnership property and their rights and duties in relation to the partnership shall be determined, subject to any agreement express or implied between the partners, by the following rules:(a) all the partners are entitled to share equally in the capital and pro

• § 25 — Expulsion of partner

  25. No majority of the partners can expel any partner unless a power to do so has been conferred by express agreement between the partners.

• § 26 — Retirement from partnership at will

  26.—(1) Where no fixed term has been agreed upon for the duration of the partnership, any partner may determine the partnership at any time on giving notice of his intention to do so to all the other partners.(2) Where the partnership has originally been constituted by deed, a notice in writing, sig

• § 27 — Where partnership for term is continued over, continuance on old terms presumed

  27.—(1) Where a partnership entered into for a fixed term is continued after the term has expired, and without any express new agreement, the rights and duties of the partners remain the same as they were at the expiration of the term, so far as is consistent with the incidents of a partnership at w

• § 28 — Duty of partners to render accounts, etc.

  28. Partners are bound to render true accounts and full information of all things affecting the partnership to any partner or his legal representatives.

• § 29 — Accountability of partners for private profits

  29.—(1) Every partner must account to the firm for any benefit derived by him without the consent of the other partners from any transaction concerning the partnership, or from any use by him of the partnership property, name or business connection.(2) This section applies also to transactions under

• § 3 — Postponement of rights of person lending or selling in consideration of share of profits in case of insolvency

  3. In the event of any person to whom money has been advanced by way of loan upon such a contract as is mentioned in section 2 or of any buyer of a goodwill in consideration of a share of the profits of the business, being adjudged a bankrupt, entering into an arrangement to pay his creditors less t

• § 30 — Duty of partner not to compete with firm

  30. If a partner, without the consent of the other partners, carries on any business of the same nature as and competing with that of the firm, he must account for and pay over to the firm all profits made by him in that business.

• § 31 — Rights of assignee of share in partnership

  31.—(1) An assignment by any partner of his share in the partnership, either absolute or by way of mortgage or redeemable charge, does not, as against the other partners, entitle the assignee, during the continuance of the partnership, to interfere in the management or administration of the partners

• § 32 — Dissolution by expiration or notice

  32.—(1) Subject to any agreement between the partners, a partnership is dissolved —(a) if entered into for a fixed term, by the expiration of that term; (b) if entered into for a single adventure or undertaking, by the termination of that adventure or undertaking; (c) if entered into for an undefi

• § 33 — Dissolution by bankruptcy, death or charge

  33.—(1) Subject to any agreement between the partners, every partnership is dissolved as regards all the partners by the death or bankruptcy of any partner.(2) A partnership may, at the option of the other partners, be dissolved if any partner suffers his share of the partnership property to be char

• § 34 — Dissolution by illegality of partnership

  34. A partnership is in every case dissolved by the happening of any event which makes it unlawful for the business of the firm to be carried on or for the members of the firm to carry it on in partnership.

• § 35 — Dissolution by court

  35. On application by a partner, the court may decree a dissolution of the partnership in any of the following cases:(a) when a partner, other than the partner suing, becomes in any way permanently incapable of performing his part of the partnership contract; (b) when a partner, other than the part

• § 36 — Rights of persons dealing with firm against apparent members of firm

  36.—(1) Where a person deals with a firm after a change in its constitution, he is entitled to treat all apparent members of the old firm as still being members of the firm until he has notice of the change.(2) An advertisement in the Gazette shall be notice as to persons who had no dealings with th

• § 37 — Right of partners to notify dissolution

  37. On the dissolution of a partnership or retirement of a partner, any partner may publicly notify the same, and may require the other partner or partners to concur for that purpose in all necessary or proper acts, if any, which cannot be done without his or their concurrence.

• § 38 — Continuing authority of partners for purposes of winding up

  38. After the dissolution of a partnership, the authority of each partner to bind the firm, and the other rights and obligations of the partners, continue notwithstanding the dissolution so far as may be necessary to wind up the affairs of the partnership, and to complete transactions begun but unfi

• § 39 — Rights of partners as to application of partnership property

  39. On the dissolution of a partnership, every partner is entitled, as against the other partners in the firm, and all persons claiming through them in respect of their interests as partners, to have the property of the partnership applied in payment of the debts and liabilities of the firm, and to

• § 4 — Meaning of firm

  4. Persons who have entered into partnership with one another are for the purposes of this Act called collectively a firm, and the name under which their business is carried on is called the firm‑name.

• § 40 — Apportionment of premium where partnership prematurely dissolved

  40. Where one partner has paid a premium to another on entering into a partnership for a fixed term, and the partnership is dissolved before the expiration of that term otherwise than by the death of a partner, the court may order the repayment of the premium, or of such part thereof as it thinks ju

• § 41 — Rights where partnership dissolved for fraud or misrepresentation

  41. Where a partnership contract is rescinded on the ground of the fraud or misrepresentation of one of the parties thereto, the party entitled to rescind is, without prejudice to any other right, entitled —(a) to a lien on, or right of retention of, the surplus of the partnership assets, after sati

• § 42 — Right of outgoing partner in certain cases to share profits made after dissolution

  42. Where any member of a firm has died or otherwise ceased to be a partner, and the surviving or continuing partners carry on the business of the firm with its capital or assets without any final settlement of accounts as between the firm and the outgoing partner or his estate, then, in the absence

• § 43 — Retiring or deceased partner’s share to be debt

  43. Subject to any agreement between the partners, the amount due from surviving or continuing partners to an outgoing partner or the representatives of a deceased partner in respect of the outgoing or deceased partner’s share is a debt accruing at the date of the dissolution or death.

• § 44 — Rule for distribution of assets on final settlement of accounts

  44. In settling accounts between the partners after a dissolution of partnership, the following rules shall, subject to any agreement, be observed:(a) losses, including losses and deficiencies of capital, shall be paid first out of profits, next out of capital, and lastly, if necessary, by the partn

• § 45 — Interpretation

  45. In this Act, unless the context otherwise requires —“business” includes every trade, occupation or profession; “court” includes every court and judge having jurisdiction in the case.

• § 46 — Saving for rules of equity and common law

  46. The rules of equity and of common law applicable to partnership shall continue in force except so far as they are inconsistent with the express provisions of this Act.

• § 47 — Short title

  47. This Act may be cited as the Partnership Act 1890.

• § 5 — Power of partner to bind firm

  5. Every partner is an agent of the firm and his other partners for the purpose of the business of the partnership; and the acts of every partner who does any act for carrying on in the usual way business of the kind carried on by the firm of which he is a member bind the firm and his partners, unle

• § 6 — Partners bound by acts on behalf of firm

  6. An act or instrument relating to the business of the firm and done or executed in the firm-name, or in any other manner showing an intention to bind the firm, by any person thereto authorised whether a partner or not, is binding on the firm and all the partners:Provided that this section shall no

• § 7 — Partner using credit of firm for private purposes

  7. Where one partner pledges the credit of the firm for a purpose apparently not connected with the firm’s ordinary course of business, the firm is not bound, unless he is in fact specially authorised by the other partners; but this section does not affect any personal liability incurred by an indiv

• § 8 — Effect of notice that firm will not be bound by acts of partner

  8. If it has been agreed between the partners that any restriction shall be placed on the power of any one or more of them to bind the firm, no act done in contravention of the agreement is binding on the firm with respect to persons having notice of the agreement.

• § 9 — Liability of partners

  9. Every partner in a firm is liable jointly with the other partners for all debts and obligations of the firm incurred while he is a partner; and after his death his estate is also severally liable in a due course of administration for such debts and obligations, so far as they remain unsatisfied,