Q: Why can the court intervene in the disputes of partnership firm?

Ans:  The court can intervene in disputes of partnership firm because the partnership is not created by status and created by contract which is enforceable in court of law. 

PARTNERSHIP NOT CREATED BY STATUS. 

In accordance with section 5 of partnership act, 1932, the relation of partnership arises from contract and not from status; and, in particular, the members of a Hindu undivided family carrying on a family business as such, or a Burmese Buddhist husband and wife carrying on business as such are not partners in such business. 

According to section 5 of contract act, 1932, the partnership is not created by status.

The relation of partnership arises:

From Contract; and not from status.

Example 1: 

Members of Hindu undivided family (Joint Family) carrying on a family business together. The family members are not partners of each other because although,  they are carrying business together but the relationship between them has not arisen from Contract but due to their family status according to their religion.

Example 2:

A Burmese Buddhist husband and wife carrying on business together according to their religion. The husband and wife are not partners of each other. 
Although, they are carrying business together but the relationship between them has not arisen from Contract but due to their marital status according to their religion.

Comments

Post a Comment

Popular posts from this blog

Q: What is partnership at will ?

Ans: According to section 7 of partnership act, 1932, when 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". It means that the duration of partnership will depend upon the will of the partners.
Read more

Q: What are the types of partner in partnership firm ?

Ans: The member of a partnership is called partners and it is not mandatory that all the partners are the same or all the partners participate in the conduct of the business or share the profit or losses equally. The partners are classified depending on the nature of work, the extent of liability, etc. There are basically six types of partner: 1. Active/managing partner: The partner who takes participation in the conduct of the business daily is known as active partner. This active  partner is also called an ostensible partner. 2. Sleeping/Dormant: The Sleeping or dormant partner does not participate in the conduct of the business but he is bound by the conduct of all the partners. 3. Nominal partner: The nominal partner  is a partner to the firm only by his name. In reality, the nominal partner has no significant or real interest in the firm. 4. Partner in profit only: The partner who agrees to share the profit but does not suffer losses. Such partner will not be liable for a...
Read more

Q: What is an authority of partner ?

Ans: The meaning of Authority of Partner means the capacity of a partner to bind the firm by his act. When the partner has the authority,  the firm will be liable and if the partner has not the authority,  the firm will not be liable. Since the partnership is not a legal person , a partner acts as an agent for the other partners.
Read more