What are the duties and rights of the partners?

Answer 1

Rights and Duties of the Partners of the Firm

Mutual trust and cordiality are the heart of smooth functioning of the partnership firm. Acts of the partner bind the firm and all partners of the firm to the outside world:

Rights of the Partners

1.Right to take part in the conduct of management of the firm.

2.Right of being consulted and chance of expression of opinion in the conduct of the business. Decisions are taken on the basis of the vote of the majority. However for the following acts the decisions needs to be taken on unanimous basis:

a) Change in the nature of the business.

b) Change in the place of business.

c) Incase of any particular item if the partnership deed provides that decision needs to be taken on unanimous basis.

d) Admission or expulsion of partner (subject to as provided in deed).

3.Right to have access to books of accounts of the firm.

4.Right to share profits of the firm as per the partnership deed, and if the deed is silent in this regard, to share profits equally.

5.Right to have interest on capital deployed for the firm.

6.Right to receive remuneration for conduct of management of the firm.

7.Right to receive interest on temporary advances made to the firm.

8.Right to be indemnified for any acts done in an ordinary course of business for the best interests of the firm.

Duties of the Partners

1. Absolute Duties

Following are the absolute duties of partners:

a) Duty to act in good faith in the conduct of partnership.

b) Duty to carry on business in true and commercial prudence for the advantage of all the partners.

c) Duty to account for true account for other partners.

d) Duty to indemnify firm for any loss caused to the firm on account of fraud done by a partner to any third party.

e) Duty to provide true and correct information with regard to transactions of the firm to all the other partners of the firm.

f) Every partner of the firm is jointly and severally liable for all the liabilities concerning the firm. A creditor of the firm can proceed against the firm or any partner of the firm to enforce his right.

g) No partner can transfer his interest or assign his interest without the permission of other partners of the firm.

2. Qualified Duties

Following are the implied duties on the part of partners of the firm unless any contrary is proved:

a) Duty to act diligently with care and prudent means in the conduct of business.

b) Duty to share losses of the firm.

c) Duty to use firm's property exclusively for the best interest of the firm's business.

d) Duty to indemnify to the firm any loss caused to the firm on account of willful neglect on part of the partner.

e) Not to account for the secret profits at the expense of the firm.

f) Not to start any business of competing nature.

Answer 2

"Care". "Care" is what makes two people help each other. If there were more of "care" in the world we would be peace against all the countries.

Answer 3

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