Mutual Rights and Liabilities of the Partners

In this forum we will give laws, details, discussion, rulings, Act and much more about the liabilities, duties of the partners in the partnership business, formation and dissolution of the partnership.

Mutual Rights and Liabilities of the Partners

Unread postby Admin » Sat Aug 04, 2012 10:25 am

Mutual Rights and Liabilities of the Partners

Subject to the contract between the partners there are following mutual rights and liabilities of the partners:

(a) A partner is not entitled to receive remuneration for taking part in the conduct of the business

(b) The partners are entitled to share equally in the profits earned and shall contribute equally to the losses sustained by the firm.

(c) Where a partner is entitled to interest on the capital subscribed by him such interest shall be payable only out of profit.

(d) A partner making for the purpose of the business any payment or advance beyond the amount of capital he has agreed to subscribe is entitled to interest thereon at the rate of six percent per annum

(e) The firm shall indemnify a partner in respect of payments made and liabilities incurred by him.
(i) in the ordinary and proper conduct of the business and
(ii) in doing such act in an emergency for the purpose of protecting the firm from loss as would be done by a person of ordinary prudence in his own case under similar circumstances and

(f) A partner shall indemnify the firm for any loss caused to it by his willful neglect in the conduct of the business of the firm.
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