Q: Elaborate the concept of partner to be the agent of firm ?

Ans: In accordance with section 18 of partnership act, 1932, subject to the provisions of the act, a partner is the agent of the firm for the purpose of business of the firm.

Example: Ali, Bilal and Chand are the partners in a business. Dawood an outsider deals with the firm through Ali.

As between Ali and Dawood, Ali is the principal.

As between Ali , Bilal and Chand , Ali is also the agent of Bilal and Chand.

As such Ali, Bilal and Chand can all sue Dawood.
Dawood can also sue Ali, Bilal and Chand.

Furthermore Ali is accountable to Bilal and Chand because he is an agent of Bilal and Chand.

So, the partner is an agent of firm and all the partners will be collectively responsible for the act of one partner as a agent because principal is responsible for the act of agent. It is also called Mutual Agency Relationship.

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