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Q: State fraud in partnership act, 1932 ?

Ans: Other partners will not be liable to fraud committed by one partner if it does not come under implied and expressed authority of partner. Thus other partners will not be liable.  Section 10 of Indian Partnership Act,  1932 mentions about the duty to indemnify for loss caused by fraud.  Every partner shall indemnify the firm for any loss caused to it by his fraud in the  conduct of the business of the firm. Section 19 mentions about the implied authority of partner and thus fraud is not the implied authority of partner.  According to section 4( definition of partner) , section 6( mode of determining existence of partnership), section 13( mutual rights and liabilities) and section 16( personal profit earned by partners) and section 18( partner to be an agent of firm ), the other partners will be liable only for the compensation of money earned by fraud of one partner and not for the punishment. 
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Q: Expressed and Implied Authority?

Q: Harish  made a fraud with another partnership firm,  are all partners liable for his fraud  ?
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Q: Darshit made a partnership agreement of his firm with another firm ? Is the partnership agreement valid ?

Ans: Under section 4 of Indian Partnership Act,  1932, the definition of partner is mentioned. According to section 4 of Indian Partnership Act,  1932, the partnership is made between two  persons. The persons can be the natural person as well as artificial person.  The partnership firm is not a seperate legal entity and all the persons of the firm will be the partners with another firm.  The company has a seperate legal entity,  A company is a “Separate Legal Entity” having its own identity distinct from its members . As a legal entity, a company can own a property in its own name, can sue as well as can be sued in its own name and can also enjoy perpetual succession, among others. In case of Mahabir cold storage v. CIT, 1991, SC, it is mentioned that the partnership firm has not seperate legal entity. 
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Q: Harish is receiving profit from the business but he has not made a partnership contract? Is he a partner ?

Ans: No ,Harish is a partner according to section 5 of partnership act, 1932 which says that partnership is not created by status but by agreement.  In case of Cox V. Hickman, it is clearly mentioned that if a person is a partner,  he must be entitled to receive the share of profit of the firm but every person who receives profit is not necessarily a partner.  According to section 4 of partnership act, partnership is between or among persons who have agreed to share profits between or among them but section 6 of partnership act mentions about the mode of determining the partnership and according to it , only the mere sharing of profit is not only the mode of determining partnership. 
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Q: Elaborate section 30(3) of the Partnership Act, 1932 ?

Ans: The problem presented is based on section 30(3) of the Partnership Act. According to section 30(3)- "The share of a minor is liable for the acts of the firm, but the minor is not personally liable for any such act." Since in the present problem 'Zuber' is a minor and is entitled to receive profits in the partnership firm. The creditors will be successful in recovering their debts only from 'A' and 'B' and only to the extent of the profits going to 'Zuber'. 'Zuber' cannot be held personally liable for the loss caused to the firm.
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Q: Illustrate section 30(3) of partnership act, 1932 ?

Question:  ' Harish', 'Sachin' and 'Zuber' entered into a business venture for sharing of profits equally. 'Zuber' is a minor. The firm suffers huge losses and Zuber is also sued  along with other partners. To what extent and towards whom , Zuber will be the defaulter ?
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Q: Elaborate the citation of Malomarch & Co. Vs. Court of Wards ?

Ans: Malomarch & Co. Vs. Court of Wards [(35 (1872) L.R.J.]),  the Privy Council in its judgment explained the principle of representation- "Where a person represents that he is a partner or permits others to consider him a partner, then the person will be liable like other partners of the firm. 
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