1. Property of the Firm (Section 14): Subject to a contract between the partners, the property
The property originally brought into the stock of the company includes all property and rights and interests firm, or acquire, by purchase or otherwise, by or for the firm, or for the purposes and during The business of the firm, and also includes the goodwill of the business.
Property and right and interest in property acquired with money, unless the contrary intention appears Belonging to the firm is believed to have been acquired for the firm.
Section 14 Analysis:
The expression 'property of the firm', also known as 'partnership property', 'partnership property', 'joint 'stock', 'common stock' or 'joint property', denotes all property, rights, and interests for which the firm,
All the participants may be entitled collectively. property which is believed to belong to the firm, in the absence of an agreement between partners showing contrary intentions, includes:
Partnership Property cases
The following items:
(i) all property, rights, and interests that the partners may have brought to the common stock: their contribution to the general business;
(ii) all property, rights, and interest acquired or purchased by or for the purposes of the firm and in the course of the business of the firm; and (iii) goodwill of the business.
Determination of the question of whether a particular asset is ultimately a 'property of the firm depends on the actual intention or agreement of the partners. Thus, the mere fact that a . property of
The partner is being used for the purposes of the firm, unless he himself constitutes the property of the partnership unless it is intended to be treated as such. The partners may, at any time by an agreement, change the property of any partner or partners (and such conversion, if made in good faith, shall be effective between the two) against the partners and the creditors of the firm) or the separate property of any partner in the partnership Property.
Goodwill: Section 14 specifically states that the goodwill of a business is subject to contract between the partners, to be regarded as the 'property' of the 'firm'. But this section does not define the term Goodwill 'Goodwill' is a concept which is very easy to understand but difficult to define. goodwill can be defined as As the value of the reputation of a business house in relation to expected profits in future and above The general level of profit earned by an undertaking belonging to the same class of business.
When a partnership firm is dissolved, in the absence of any agreement each partner has the right to Conversely, the goodwill of the business should be sold for the benefit of all the partners.
Goodwill is a part of the assets of the firm. It can be sold separately or with other assets of the firm. Any partner may enter into an agreement with the buyer on the sale of the goodwill of the firm that such partner shall not carry on any business similar to that of the firm within a specified period, or within the specified local limits and notwithstanding anything contained in section 27 of the Indian Contract Act, 1872. Such an agreement shall be valid if the restrictions imposed are justified.
Property of a Partner: Where the property exclusively belongs to an individual, it does not become the property of the partnership merely because it is used for the business of the partnership, such property in the agreement will become the property of the partnership.
2. Application of the property of the firm (section 15): Subject to the contract between partners, the property of the firm shall be held and used by the partners exclusively for the purposes of the business.
Analysis of Section 15:
Section 15 provides that the property of the firm shall be held and used exclusively for the purpose of the company. In a partnership, there is a community of interest that all the partners share in the property. Strong. But it does not mean that during the subsistence of the partnership, a particular partner has any Proprietary interest in the assets of the firm. Each partner of the firm has the right to receive his share Profit as long as the firm is in existence and also has the right to see that all the properties of the partnership apply used for and for the purpose of the partnership business.
Personal profit earned by partners (Section 16)
Subject to a contract between the partners, in accordance with section 16,—
(a) if a partner derives any profit for himself from any transaction of the firm or from the use of the property or business connection in the name of the firm or the firm, he shall account for that profit and pay to the firm;
(b) if a partner carries on and competes with any business of a similar nature to that of the firm, he accounts for all profits made by him in that business and pays to the firm.
Section 16. analysis of
where a partner derives any profit for himself from any transaction of the firm or from the use of the property, or firm or business connection in the name of the firm, he has to account for that profit and pay to the firm.
RIGHTS AND DUTIES OF PARTNERS AFTER A CHANGE IN THE FIRM (SECTION 17)
Before going into the rights and duties, we must first know how the constitution of the firm can be changed. This can happen in one of four ways, namely,
According to section 17, subject to a contract between the partners—
(a) after change in the firm: Where there is a change in the constitution of a firm, the mutual rights and duties of the partners in the reconstituted firm remain the same as they were immediately before the change, so far as may be;
(b) after the expiry of the term of the firm: Where a firm formed for a specified period continues to carry on the business after the expiry of that period, the mutual rights and duties of the partners remain the same as they were before the termination, where as long as they may correspond to the events of the partnership at will; And
(c) where additional undertakings are undertaken: where a firm constituted to undertake one or more adventures or undertakings undertakes other adventures or undertakings the same as in connection with the original adventures or undertakings.
0 Comments