Definition, Meaning and Nature of Partnership MCQ Quiz in বাংলা - Objective Question with Answer for Definition, Meaning and Nature of Partnership - বিনামূল্যে ডাউনলোড করুন [PDF]

As per section 30 of the Indian Partnership Act, provides that though a minor cannot be a partner in a firm, but, with the consent of all the partners for the time being, he may be admitted to the benefits of partnership by an agreement executed through his guardian with the other partners.

Devaynes v Noble

The rule in Clayton’s Case (or, to give it its full legal name and citation: Devaynes v Noble (Clayton’s Case) (1816) 1 Mer 572) is a common law presumption in relation to the distribution of monies from a bank account.

It is based on the legal fiction that, if an account is in credit, the first sum paid in will also be the first to be drawn out and if the account is over drawn, a payment in is allocated to the earliest debit on the account which caused the account to be overdraw.

Applications to a partnership: The rule has special application in relation to partnerships upon the death of a partner. In most jurisdictions, the death of a partner ordinarily has the legal effect of dissolving the firm. The partner’s personal representatives have no right to step into the partner’s shoes; they cannot take part in its management; they can only claim the deceased partner’s share in the assets of the firm. The banker, who provides financial accommodation to the firm, can have no objection in continuing the account; the bank can presume that the surviving partners will account to the representatives of the deceased for his share in the assets. Where the firm has a debit balance the account should be stopped to fix the liability of the estate of the deceased partner and to avoid the operation of the rule in Clayton’s case.  

The categories of contents of partnership deed are general clause, special clause and payment clause.

A partnership deed, also known as a partnership agreement, is a document that outlines in details the rights and responsibilities of all parties to a business operation. It has the force of law and is designed to guide the partners in the conduct of the business.

Trust deed confers on the trustees, the power to obtain loan.

A company in which 50.25% of shares are held by one State Government while the rest of the shares are held by private sector companies and by retail shareholders i.e., members of public, is a Public company.

A partner has executed an agreement for sale of the immovable property of the firm without knowledge of other partner. Being outside implied authority of a partner the firm disowns liability to third party.

Under Section 7 of the Indian Partnership Act, 1932 “Where no provision is made by contract between the partners for the duration of their partnership, or for the determination of their partnership, the partnership is Partnership at will”.

The following can enter into a partnership:
1.    Individual: An individual, who is competent to contract, can become a partner in the partnership firm. If there are more than two partners in a firm, an individual can be a partner in his individual capacity as well as in a representative capacity as Karta of the Hindu undivided family.
2.    Firm: A partnership firm is not a person and therefore a firm cannot enter into partnership with any firm or individual. But a partner of the partnership firm can enter into partnership with other persons and he can share the profits of the said firm with his other co-partners of the parent firm.
3.    Hindu Undivided Family: A Karta of the Hindu undivided family can become a partner in a partnership in his individual capacity, provided the member has contributed his self acquired or personal skill and labor.
4.    Company: A company is a juristic person and therefore can become a partner in a partnership firm, if it is authorized to do so by its objects.
5.    Trustees: Trustees of private religious trust, family trust and trustees of Hindu mutts or other religious endowments are juristic persons and can therefore enter into partnership, unless their constitution or objects forbid.

Female can be admitted as a partner in firm but not in HUF.