An Act to define and amend the law relating to partnership. WHEREAS it is expedient to define and amend the law relating to partnership; it is hereby enacted as follows:--
In this Act, unless there is anything repugnant in the subject or context,--
(a) an "act of a firm" means any act or omission by all the partners, or by any partner or agent ofthe firm which gives rise to a right enforceable by or against the firm;
(b) "business" includes every trade, occupation and profession;
(c) "prescribed" means prescribed by rules made under this Act;
(d) "third party", used in relation to a firm or to a partner therein, means any person who is not apartner in the firm; and
(e) expressions used but not defined in this Act and defined in the Indian Contract Act, 1872 (9 of1872), shall have the meanings assigned to them in that Act.
The unrepealed provisions of the Indian ContractAct, 1872 (9 of 1872), save in so far as they are inconsistent with the express provisions of this Act, shallcontinue to apply to firms.
"Partnership" is the relationbetween persons who have agreed to share the profits of a business carried on by all or any of them actingfor all.
Persons who have entered into partnership with one another are called individually "partners" andcollectively "a firm", and the name under which their business is carried on is called the "firm name".
The relation of partnership arises from contract and not fromstatus;
and, in particular, the members of a Hindu undivided family carrying on a family business as such, ora Burmese Buddhist husband and wife carrying on business as such are not partners in such business.
In determining whether a group of persons is oris not a firm, or whether a person is or is not a partner in a firm, regard shall be had to the real relationbetween the parties, as shown by all relevant facts taken together.
Explanation 1.--The sharing of profits or of gross returns arising from property by persons holding ajoint or common interest in that property does not of itself make such persons partners.
Explanation 2.--The receipt by a person of a share of the profits of a business, or of a paymentcontingent upon the earning of profits or varying with the profits earned by a business, does not of itselfmake him a partner with the persons carrying on the business;
and, in particular, the receipt of such share or payment--
(a) by a lender of money to persons engaged or about to engage in any business,
(b) by a servant or agent as remuneration,
(c) by the widow or child of a deceased partner, as annuity, or
(d) by a previous owner or part owner of the business, as consideration for the sale of thegoodwill or share thereof,
does not of itself make the receiver a partner with the persons carrying on the business.
Where no provision is made by contract between the partners for theduration of their partnership or for the determination of their partnership, the partnership is "partnership atwill".
A person may become a partner with another person in particularadventures or undertakings.
Partners are bound to carry on the business of the firm to thegreatest common advantage, to be just and faithful to each other, and to render true accounts and fullinformation of all things affecting the firm to any partner or his legal representative.
Every partner shall indemnify the firm for anyloss caused to it by his fraud in the conduct of the business of the firm.
(1) Subject to the provisions of this Act, the mutual rights and dutiesof the partners of a firm may be determined by contract between the partners, and such contract may beexpressed or may be implied by a course of dealing.
Such contract may be varied by consent of all the partners, and such consent may be expressed ormay be implied by a course of dealing.
(2) Notwithstanding anything contained in section 27 of the Indian Contract Act, 1872 (9 of 1872),such contracts may provide that a partner shall not carry on any business other than that of the firm whilehe is a partner.
Subject to contract between the partners--
(a) every partner has a right to take part in the conduct of the business;
(b) every partner is bound to attend diligently to his duties in the conduct of the business;
(c) any difference arising as to ordinary matters connected with the business may be decided by amajority of the partners, and every partner shall have the right to express his opinion before the matteris decided, but no change may be made in the nature of the business without the consent of all thepartners; and
(d) every partner has a right to have access to and to inspect and copy any of the booksof the firm.
Subject to contract between 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 tothe losses sustained by the firm;
(c) where a partner is entitled to interest on the capital subscribed by him such interest shall bepayable only out of profits;
(d) a partner making, for the purposes of the business, any payment or advance beyond theamount of capital he has agreed to subscribe, is entitled to interest thereon at the rate of six per cent.per annum;
(e) the firm shall indemnify a partner in respect of payments made and liabilities incurred byhim--
(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, aswould 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 wilful neglect in the conductof the business of the firm.
Subject to contract between the partners, the property of the firmincludes all property and rights and interests in property originally brought into the stock of the firm, oracquired, by purchase or otherwise, by or for the firm, or for the purposes and in the course of thebusiness of the firm, and includes also the goodwill of the business.
Unless the contrary intention appears, property and rights and interests in property acquired withmoney belonging to the firm are deemed to have been acquired for the firm.
Subject to contract between the partners, the propertyof the firm shall be held and used by the partners exclusively for the purposes of the business.
Subject to contract between the partners,--
(a) if a partner derives any profits for himself from any transaction of the firm, or from the use ofthe property or business connection of the firm or the firm name, he shall account for that profit andpay it to the firm;
(b) if a partner carries on any business of the same nature as and competing with that of the firm,he shall account for and pay to the firm all profits made by him in that business.
Subject to contract between thepartners,--
(a) where a change occurs in the constitution of a firm, the mutual rights and duties of thepartners in the reconstituted firm remain the same as they were immediately before the change, as faras may be;
(b) where a firm constituted for a fixed term continues to carry on business after the expiry of thatterm, the mutual rights and duties of the partners remain the same as they were before the expiry, sofar as they may be consistent with the incidents of partnership at will; and
(c) where a firm constituted to carry out one or more adventures or undertakings carries out otheradventures or undertakings, the mutual rights and duties of the partners in respect of the otheradventures or undertakings are the same as those in respect of the original adventures or undertakings.
Subject to the provisions of this Act, a partner is the agent ofthe firm for the purposes of the business of the firm.
(1) Subject to the provisions of section 22,the act of a partner which is done to carry on, in the usual way, business of the kind carried on by thefirm, binds the firm.
The authority of a partner to bind the firm conferred by this section is called his implied authority--.
(2) In the absence of any usage or custom of trade to the contrary, the implied authority of a partnerdoes not empower him to--
(a) submit a dispute relating to the business of the firm to arbitration,
(b) open a banking account on behalf of the firm in his own name,
(c) compromise or relinquish any claim or portion of a claim by the firm,
(d) withdraw a suit or proceeding filed on behalf of the firm,
(e) admit any liability in a suit or proceeding against the firm,
(f) acquire immovable property on behalf of the firm,
(h) transfer immovable property belonging to the firm, or
(g) enter into partnership on behalf of the firm.
The partners in a firm may, bycontract between the partners, extend or restrict the implied authority of any partner.
Notwithstanding any such restriction, any act done by a partner on behalf of the firm which fallswithin his implied authority binds the firm, unless the person with whom he is dealing knows of therestriction or does not know or believe that partner to be a partner.
A Partner has authority, in an emergency, to do all suchacts for the purpose of protecting the firm from loss as would be done by a person of ordinary prudence,in his own case, acting under similar circumstances, and such acts bind the firm.
In order to bind a firm, an act or instrument done or executedby a partner or other person on behalf of the firm shall be done or executed in the firm name, or in anyother manner expressing or implying an intention to bind the firm.
An admission or representation made by a partnerconcerning the affairs of the firm is evidence against the firm, if it is made in the ordinary course ofbusiness.
Notice to a partner who habitually acts in the business of thefirm of any matter relating to the affairs of the firm operates as notice to the firm, except in the case of afraud on the firm committed by or with the consent of that partner.
Every partner is liable, jointly with all the otherpartners and also severally, for all acts of the firm done while he is a partner.
Where, by the wrongful act or omissionof a partner acting in the ordinary course of the business of a firm, or with the authority of his partners,loss or injury is caused to any third party, or any penalty is incurred, the firm is liable therefor to the sameextent as the partner.
Where--
(a) a partner acting within his apparent authority receives money or property from a third partyand misapplies it, or
(b) a firm in the course of its business receives money or property from a third party, and themoney or property is misapplied by any of the partners while it is in the custody of the firm,
the firm is liable to make good the loss.
(1) Any one who by words spoken or written or by conduct represents himself, orknowingly permits himself to be represented, to be a partner in a firm, is liable as a partner in that firm toany one who has on the faith of any such representation given credit to the firm, whether the personrepresenting himself or represented to be a partner does or does not know that the representation hasreached the person so giving credit.
(2) Where after a partner's death the business is continued in the old firm name, the continued use ofthat name or of the deceased partner's name as a part thereof shall not itself make his legal representativeor his estate liable for any act of the firm done after his death.
(1) A transfer by a partner of his interest in thefirm, either absolute or by mortgage, or by the creation by him of a charge on such interest, does notentitle the transferee, during the continuance of the firm, to interfere in the conduct of the business, or torequire accounts, or to inspect the books of the firm, but entitles the transferee only to receive the share ofprofits of the transferring partner, and the transferee shall accept the account of profits agreed to by thepartners.
(2) If the firm is dissolved or if the transferring partner ceases to be a partner, the transferee is entitledas against the remaining partners to receive the share of the assets of the firm to which the transferringpartner is entitled, and, for the purpose of ascertaining that share, to an account as from the date of thedissolution.
(1) A person who is a minor according to thelaw to which he is subject may not be a partner in a firm, but, with the consent of all the partners for thetime being, he may be admitted to the benefits of partnership.
(2) Such minor has a right to such share of the property and of the profits of the firm as may beagreed upon, and he may have access to and inspect and copy any of the accounts of the firm.
(3) Such minor's share is liable for the acts of the firm, but the minor is not personally liable for anysuch act.
(4) Such minor may not sue the partners for an account or payment of his share of the property orprofits of the firm, save when severing his connection with the firm, and in such case the amount of hisshare shall be determined by a valuation made as far as possible in accordance with the rules contained insection 48:
Provided that all the partners acting together or any partner entitled to dissolve the firm upon notice toother partners may elect in such suit to dissolve the firm, and thereupon the Court shall proceed with thesuit as one for dissolution and for settling accounts between the partners, and the amount of the share ofthe minor shall be determined along with the shares of the partners.
(5) At any time within six months of his attaining majority, or of his obtaining knowledge that he hadbeen admitted to the benefits of partnership, whichever date is later, such person may give public noticethat he has elected to become or that he has elected not to become a partner in the firm, and such noticeshall determine his position as regards the firm:
Provided that, if he fails to give such notice, he shall become a partner in the firm on the expiry of thesaid six months.
(6) Where any person has been admitted as a minor to the benefits of partnership in a firm, the burdenof proving the fact that such person had no knowledge of such admission until a particular date after theexpiry of six months of his attaining majority shall lie on the persons asserting that fact.
(7) Where such person becomes a partner,--
(a) his rights and liabilities as a minor continue up to the date on which he becomes a partner, buthe also becomes personally liable to third parties for all acts of the firm done since he was admitted tothe benefits of partnership, and
(b) his share in the property and profits of the firm shall be the share to which he was entitled as aminor.
(8) Where such person elects not to become a partner,--
(a) his rights and liabilities shall continue to be those of a minor under this section up to the dateon which he gives public notice,
(b) his share shall not be liable for any acts of the firm done after the date of the notice,and
(c) he shall be entitled to sue the partners for his share of the property and profits in accordancewith sub-section (4).
(9) Nothing in sub-sections (7) and (8) shall affect the provisions of section 28.
(1) Subject to contract between the partners and to the provisions ofsection 30, no person shall be introduced as a partner into a firm without the consent of all the existingpartners.
(2) Subject to the provisions of section 30, a person who is introduced as a partner into a firm doesnot thereby become liable for any act of the firm done before he became a partner.
(1) A partner may retire--
(a) with the consent of all the other partners,
(b) in accordance with an express agreement by the partners, or
(c) where the partnership is at will, by giving notice in writing to all the other partners of hisintention to retire.
(2) A retiring partner may be discharged from any liability to any third party for acts of the firm donebefore his retirement by an agreement made by him with such third party and the partners of thereconstituted firm, and such agreement may be implied by a course of dealing between such third partyand the reconstituted firm after he had knowledge of the retirement.
(3) Notwithstanding the retirement of a partner from a firm, he and the partners continue tobe liable as partners to third parties for any act done by any of them which would have been anact of the firm if done before the retirement, until public notice is given of the retirement:
Provided that a retired partner is not liable to any third party who deals with the firm without knowingthat he was a partner.
(4) Notices under sub-section (3) may be given by the retired partner or by any partner of thereconstituted firm.
(1) A partner may not be expelled from a firm by any majority of thepartners, save in the exercise in good faith of powers conferred by contract between the partners.
(2) The provisions of sub-sections (2), (3) and (4) of section 32 shall apply to an expelled partner asif he were a retired partner.
(1) Where a partner in a firm is adjudicated an insolvent he ceasesto be a partner on the date on which the order of adjudication is made, whether or not the firm isthereby dissolved.
(2) Where under a contract between the partners the firm is not dissolved by the adjudication of apartner as an insolvent, the estate of a partner so adjudicated is not liable for any act of the firm and thefirm is not liable for any act of the insolvent, done after the date on which the order of adjudication ismade.
Where under a contract between the partners the firmis not dissolved by the death of a partner, the estate of a deceased partner is not liable for any act of thefirm done after his death.
(1) An outgoing partner may carry on a business competing with that of the firm and he mayadvertise such business, but, subject to contract to the contrary, he may not--
(a) use the firm name,
(b) represent himself as carrying on the business of the firm, or
(c) solicit the custom of persons who were dealing with the firm before he ceased to be a partner.
(2) A partner may make an agreement with his partners that on ceasing to be a partner he will notcarry on any business similar to that of the firm within a specified period or within specified local limits;and, notwithstanding anything contained in section 27 of the Indian Contract Act, 1872 (9 of 1872), suchagreement shall be valid if the restrictions imposed are reasonable.
Where any memberof a firm has died or otherwise ceased to be a partner, and the surviving or continuing partners carry onthe business of the firm with the property of the firm without any final settlement of accounts as betweenthem and the outgoing partner or his estate, then, in the absence of a contract to the contrary, the outgoingpartner or his estate is entitled at the option of himself or his representatives to such share of the profitsmade since he ceased to be a partner as may be attributable to the use of his share of the property of thefirm or to interest at the rate of six per cent. per annum on the amount of his share in the property of thefirm:
Provided that where by contract between the partners an option is given to surviving or continuingpartners to purchase the interest of a deceased or outgoing partner, and that option is duly exercised, theestate of the deceased partner, or the outgoing partner or his estate, as the case may be, is not entitled toany further or other share of profits; but if any partner assuming to act in exercise of the option does notin all material respects comply with the terms thereof, he is liable to account under the foregoingprovisions of this section.
A continuing guarantee given to a firm, or to a third party in respect of the transactions of a firm, is, in the absence of agreement to the contrary, revoked as to future transactions from the date of any change in the constitution of the firm.
The dissolution of partnership between all the partners of a firm is calledthe dissolution of the firm.
A firm may be dissolved with the consent of all the partners or inaccordance with a contract between the partners.
A firm is dissolved--
(a) by the adjudication of all the partners or of all the partners but one as insolvent, or
(b) by the happening of any event which makes it unlawful for the business of the firm to becarried on or for the partners to carry it on in partnership :
Provided that, where more than one separate adventure or undertaking is carried on by the firm, theillegality of one or more shall not of itself cause the dissolution of the firm in respect of its lawfuladventures and undertakings.
Subject to contract between thepartners a firm is dissolved--
(a) if constituted for a fixed term, by the expiry of that term;
(b) if constituted to carry out one or more adventures or undertakings, by the completion thereof;
(c) by the death of a partner; and
(d) by the adjudication of a partner as an insolvent.
(1) Where the partnership is at will, the firm maybe dissolved by any partner giving notice in writing to all the other partners of his intention to dissolve thefirm.
(2) The firm is dissolved as from the date mentioned in the notice as the date of dissolution or, if nodate is so mentioned, as from the date of the communication of the notice.
At the suit of a partner, the Court may dissolve a firm on any of thefollowing grounds, namely:--
(a) that a partner has become of unsound mind, in which case the suit may be brought as well bythe next friend of the partner who has become of unsound mind as by any other partner;
(b) that a partner, other than the partner suing, has become in any way permanently incapable ofperforming his duties as partner;
(c) that a partner, other than the partner suing, is guilty of conduct which is likely to affectprejudicially the carrying on of the business, regard being had to the nature of the business;
(d) that a partner, other than the partner suing, wilfully or persistently commits breach ofagreements relating to the management of the affairs of the firm or the conduct of its business, orotherwise so conducts himself in matters relating to the business that it is not reasonably practicablefor the other partners to carry on the business in partnership with hint;
(e) that a partner, other than the partner suing, has in any way transferred the whole of his interestin the firm to a third party, or has allowed his share to be charged under the provisions of rule 49 ofOrder XXI of the First Schedule to the Code of Civil Procedure, 1908 (5 of 1908), or has allowed it tobe sold in the recovery of arrears of land-revenue or of any dues recoverable as arrears of landrevenue due by the partner;
(f) that the business of the firm cannot be carried on save at a loss; or
(g) on any ground which renders it just and equitable that the firm should be dissolved.
(1) Notwithstanding the dissolution of afirm, the partners continue to be liable as such to third parties for any act done by any of them whichwould have been an act of the firm if done before the dissolution, until public notice is given of thedissolution:
Provided that the estate of a partner who dies, or who is adjudicated an insolvent, or of a partner who,not having been known to the person dealing with the firm to be a partner, retires from the firm, is notliable under this section for acts done after the date on which he ceases to be a partner.
(2) Notices under sub-section (1) may be given by any partner.
On the dissolution of afirm every partner or his representative is entitled, as against all the other partners or theirrepresentatives, to have the property of the firm applied in payment of the debts and liabilities of the firm, and to have the surplus distributed among the partners or their representatives according to theirrights.
After the dissolution of a firmthe authority of each partner to bind the firm, and the other mutual rights and obligations of the partners,continue notwithstanding the dissolution, so far as may be necessary to wind up the affairs of the firm andto complete transactions begun but unfinished at the time of the dissolution, but not otherwise:
Provided that the firm is in no case bound by the acts of a partner who has been adjudicated insolvent;but this proviso does not affect the liability of any person who has after the adjudication representedhimself or knowingly permitted himself to be represented as a partner of the insolvent.
In settling the accounts of a firm afterdissolution, the following rules shall, subject to agreement by the partners, be observed: --
(a) Losses, including deficiencies of capital, shall be paid first out of profits, next out of capital,and, lastly, if necessary, by the partners individually in the proportions in which they were entitled toshare profits.
(b) The assets of the firm, including any sums contributed by the partners to make up deficienciesof capital, shall be applied in the following manner and order:--
(i) in paying the debts of the firm to third parties;
(ii) in paying to each partner rateably what is due to him from the firm for advances asdistinguished from capital;
(iii) in paying to each partner rateably what is due to him on account of capital; and
(iv) the residue, if any, shall be divided among the partners in the proportions in which theywere entitled to share profits.
Where there are joint debts due from the firm,and also separate debts due from any partner, the property of the firm shall be applied in the first instancein payment of the debts of the firm, and, if there is any surplus, then the share of each partner shall beapplied in payment of his separate debts or paid to him. The separate property of any partner shall beapplied first, in the payment of his separate debts, and the surplus (if any) in the payment of the debts ofthe firm.
Subject to contract between the partners, theprovisions of clause (a) of section 16 shall apply to transactions by any surviving partner or by therepresentatives of a deceased partner, undertaken after the firm is dissolved on account of the death of apartner and before its affairs have been completely wound up:
Provided that where any partner or his representative has bought the goodwill of the firm, nothing inthis section shall affect his right to use the firm name.
Where a partner has paid a premium onentering into partnership for a fixed term, and the firm is dissolved before the expiration of that termotherwise than by the death of a partner, he shall be entitled to repayment of the premium or of such partthereof as may be reasonable, regard being had to the terms upon which he became a partner and to thelength of time during which he was a partner, unless--
(a) the dissolution is mainly due to his own misconduct, or
(b) the dissolution is in pursuance of an agreement containing no provision for the return of thepremium or any part of it.
Where acontract creating partnership is rescinded on the ground of the fraud or misrepresentation of any of the parties thereto, the party entitled to rescind is, without prejudice to any other right, entitled--
(a) to a lien on, or a right of retention of, the surplus or the assets of the firm remaining after thedebts of the firm have been paid, for any sum paid by him for the purchase of a share in the firm andfor any capital contributed by him;
(b) to rank as a creditor of the firm in respect of any payment made by him towards the debts ofthe firm; and
(c) to be indemnified by the partner or partners guilty of the fraud or misrepresentation against allthe debts of the firm.
After a firm is dissolved, everypartner or his representative may, in the absence of a contract between the partners to the contrary,restrain any other partner or his representative from carrying on a similar business in the firm name orfrom using any of the property of the firm for his own benefit, until the affairs of the firm have beencompletely wound up:
Provided that where any partner or his representative has bought the goodwill of the firm, nothing inthis section shall affect his right to use the firm name.
Partners may, upon or in anticipation of the dissolution ofthe firm, make an agreement that some or all of them will not carry on a business similar to that of thefirm within a specified period or within specified local limits; and notwithstanding anything contained insection 27 of the Indian Contract Act, 1872 (9 of 1872), such agreement shall be valid if the restrictionsimposed are reasonable.
(1) In settling the accounts of a firm after dissolution, the goodwill shall, subject tocontract between the partners, be included in the assets, and it may be sold either separately or along withother property of the firm.
(2) Where the goodwill of a firm is sold after dissolution, a partner may carry on a businesscompeting with that of the buyer and he may advertise such business, but, subject to agreement betweenhim and the buyer, he may not--
(a) use the firm name,
(c) represent himself as carrying on the business of the firm, or
(c) solicit the custom of persons who were dealing with the firm before its dissolution.
(3) Any partner may, upon the sale of the goodwill of a firm, make an agreement with the buyer thatsuch partner will not carry on any business similar to that of the firm within a specified period or withinspecified local limits, and, notwithstanding anything contained in section 27 of the Indian Contract Act,1872 (9 of 1872), such agreement shall be valid if the restrictions imposed are reasonable.
(1) The State Government may appoint Registrars of Firms for thepurposes of this Act, and may define the areas within which they shall exercise their powers and performtheir duties.
(2) Every Registrar shall be deemed to be a public servant within the meaning of section 21 of theIndian Penal Code (45 of 1860).
(1) The registration of a firm may be effected at any time bysending by post or delivering to the Registrar of the area in which any place of business of the firm issituated or proposed to be situated, a statement in the prescribed form and accompanied by the prescribedfee, stating--
(a) the firm name,
(b) the place or principal place of business of the firm,
(c) the names of any other places where the firm carries on business,
(d) the date when each partner joined the firm,
(e) the names in full and permanent addresses of the partners, and
(f) the duration of the firm.
The statement shall be signed by all the partners, or by their agents specially authorised in this behalf.
(2) Each person signing the statement shall also verify it in the manner prescribed.
(3) A firm name shall not contain any of the following words, namely:--
"Crown", "Emperor", "Empress", "Empire", "Imperial", "King", "Queen", "Royal", or wordsexpressing or implying the sanction, approval or patronage of 1 Government 2,except 3[whenthe State Government] signifies 4[its] consent to the use of such words as part of the firm name byorder in writing 5
Where the Registrar is satisfied that the provisions of section 58 have been dulycomplied with, he shall record an entry of the statement in a register called the Register of Firms, andshall file the statement.
STATE AMENDMENTS
Karnataka
Amendment of section 59A.--In section 59A of the Indian Partnership Act, 1932 (Central Act IX of1932), in sub-section (1), for the words "by reason of the reorganization of States, the words, figures andbrackets "by reason of the addition of the Bellary District to the State of Mysore under the Andhra StateAct, 1953 (Central Act XXX of 1953), or of the reorganization of States under the States ReorganisationAct, 1956 (Central Act 37 of 1956)" shall be substituted.
[Vide Karnataka Act 19 of 1961, s. 2]
Maharashtra
Amendment of section 59A--1 of IX of 1932.-In section 59A-1 of the Indian Partnership Act, 1932(IX of 1932), in its application to the State of Maharashtra (hereinafter referred to as "the principal Act"),for the words "one hundred rupees" the words "one thousand rupees" shall be substituted.
[Vide Maharashtra Act 16 of 2018, s. 2]
(1) When analteration is made in the firm name or in the location of the principal place of business of a registeredfirm, a statement may be sent to the Registrar accompanied by the prescribed fee, specifying thealteration, and signed and verified in the manner required under section 58.
(2) When the Registrar is satisfied that the provisions of sub-section (1) have been duly compliedwith, he shall amend the entry relating to the firm in the Register of Firms in accordance with thestatement, and shall file it along with the statement relating to the firm filed under section 59.
When a registered firm discontinues business atany place or begins to carry or business at any place, such place not being its principal place of business,any partner or agent of the firm may send intimation thereof to the Registrar, who shall make a note ofsuch intimation in the entry relating to the firm in the Register of Firms, and shall file the intimation alongwith the statement relating to the firm filed under section 59.
When any partner in a registered firmalters his name or permanent address, an intimation of the alteration may be sent by any partner or agentof the firm to the Registrar, who shall deal with it in the manner provided in section 61.
(1)When a change occurs in the constitution of a registered firm any incoming, continuing or outgoingpartner, and when a registered firm is dissolved any person who was a partner immediately before the dissolution, or the agent of any such partner or person specially authorised in this behalf, may give noticeto the Registrar of such change or dissolution, specifying the date thereof; and the Registrar shall make arecord of the notice in the entry relating to the firm in the Register of Firms, and shall file the notice alongwith the statement relating to the firm filed under section 59.
(2) When a minor who has been admitted to the benefits of partnership in a firm attains majority andelects to become or not to become a partner, and the firm is then a registered firm, he, or his agentspecially authorised in this behalf, may give notice to the Registrar that he has or has not become apartner, and the Registrar shall deal with the notice in the manner provided in sub-section (1)
(1) The Registrar shill have power at all times to rectify any mistakein order to bring the entry in the Register of Firms relating to any firm into conformity with thedocuments relating to that firm filed under this Chapter.
(2) On application made by all the parties who have signed any document relating to a firm filedunder this Chapter, the Registrar may rectify any mistake in such document or in the record or notethereof made in the Register of Firms.
A Court deciding any matter relating to aregistered firm may direct that the Registrar shall make any amendment in the entry in the Register ofFirms relating to such firm which is consequential upon its decision; and the Registrar shall amend theentry accordingly.
(1) The Register of Firms shall be open toinspection by any person on payment of such fee as may be prescribed.
(2) All statements, notices and intimations filed under this Chapter shall be open to inspection,subject to such conditions and on payment of such fee as may be prescribed.
The Registrar shall on application furnish to any person, on payment of suchfee as may be prescribed, a copy, certified under his hand, of any entry or portion thereof in the Registerof Firms.
(1) Any statement, intimation or notice recorded or noted in the Register ofFirms shall, as against any person by whom or on whose behalf such statement, intimation or notice wassigned, be conclusive proof of any fact therein stated.
(2) A certified copy of an entry relating to a firm in the Register of Firms may be produced in proofof the fact of the registration of such firm, and of the contents of any statement, intimation or noticerecorded or noted therein.
(1) No suit to enforce a right arising from a contract or conferred bythis Act shall be institutes in any Court by or on behalf of any person suing as a partner in a firm againstthe firm or any person alleged to be or to have been a partner in the firm unless the firm is registered andthe person suing is or has been shown in the Register of Firms as a partner in the firm.
(2) No suit to enforce a tight arising from a contract shall be instituted in any Court by or on behalf ofa firm against any third party unless the firm is registered and the persons suing are or have been shownin the Register of Firms as partners in the firm.
(3) The provisions of sub-sections (1) and (2) shall apply also to a claim of set-off or other proceedingto enforce a right arising from a contract, but shall not affect--
(a) the enforcement of any right to sue for the dissolution of a firm or for accounts of a dissolvedfirm, or a ay right or power to realise the property of a dissolved firm, or
(b) the powers of an official assignee, receiver or Court under the Presidency-towns InsolvencyAct, 1909 (2 of 1909), or the Provincial Insolvency Act, 1920 (5 of 1920), to realise the property ofan insolvent partner.
(4) This section shall not apply--
(a) to firms or to partners in firms which have no place of business in 1[the territories to whichthis Act extends], or whose places of business in 2[the said territories] are situated in areas to which,by notification under 3[section 56], this Chapter does not apply, or
(b) to any suit or claim of set-off not exceeding one hundred rupees in value which, in thePresidency-towns, is not of a kind specified in section 19 of the Presidency Small Cause Courts Act,1882 (15 of 1882), or, outside the Presidency-towns, is not of a kind specified in the Second Scheduleto the Provincial Small Cause Courts Act, 1887 (9 of 1887), or to any proceeding in execution orother proceeding incidental to or arising from any such suit or claim.
STATE AMENDMENT
Maharashtra
Substitution of section 69A of IX of 1932.--For section 69A of the principal Act, the followingsection shall be substituted, namely:--
"69A. Charges for delay in compliance of section 60, 61, 62 or 63.--If any statement, intimation ornotice under section 60, 61, 62 or as the case may be, 63, in respect of any registered firm is not sent orgiven to the Registrar, within the period specified in that section, the Registrar may, make suitableamendments in the records relating to the firm, upon payment of charges for delay in sending or givingthe same, at the rate of rupees two thousand per year or part thereof in respect of the period between thedate of expiry of the period specified in that section and the date of making the payment.".
[Vide Maharashtra Act 16 of 2018, s. 3]
Any person who signs any statement, amendingstatement, notice or intimation under this Chapter containing any particular which he knows to be false ordoes not believe to be true, or containing particulars which he knows to be incomplete or does not believeto be complete, shall be punishable with imprisonment which may extend to three months, or with fine, orwith both.
(1) The 1[State Government] 2[may by notification in the OfficialGazette make rules] prescribing the fees which shall accompany documents sent to the Registrar of Firms,or which shall be payable for the inspection of documents in the custody of the Registrar of Firms, or forcopies from the Register of Firms:
Provided that such fees shall not exceed the maximum fees specified in Schedule I.
(2) The State Government may 3[also] make rules--
(a) prescribing the form of statement submitted under section 58, and of the verification thereof;
(b) requiring statements, intimations and notices under sections 60, 61, 62 and 63 to be inprescribed form, and prescribing the form thereof;
(c) prescribing the form of the Register of Firms, and the mode in which entries relating to firmsare to be made therein, and the mode in which such entries are to be amended or notes made therein;
(d) regulating the procedure of the Registrar when disputes arise;
(e) regulating the filing of documents received by the Registrar;
(f) prescribing conditions for the inspection of original documents;
(g) regulating the grant of copies;
(h) regulating the elimination of registers and documents;
(i) providing for the maintenance and form of an index to the Register of Firms; and
(j) generally, to carry out the purposes of this Chapter.
(3) All rules made under this section shall be subject to the condition of previous publication.
4[(4) Every rule made by the State Government under this section shall be laid, as soon as it is made,before the State Legislature.]
A public notice under this Act is given--
(a) where it relates to the retirement or expulsion of a partner from a registered firm, or to thedissolution of a registered firm, or to the election to become or not to become a partner in a registeredfirm by a person attaining majority who was admitted as a minor to the benefits of partnership, bynotice to the Registrar of Firms under section 63, and by publication in the Official Gazette and in atleast one vernacular newspaper circulating in the district where the firm to which it relates has itsplace or principal place of business, and
(b) in any other case, by publication in the Official Gazette and in at least one vernacularnewspaper circulating in the district where the firm to which it relates has its place or principal placeof business.
[Repeals.] Rep. by the Repealing Act, 1938 (1 of 1938), s. 2 and Schedule.
Nothing in this Act or any repeal effected thereby shall affect or be deemed to affect--
(a) any right, title, interest, obligation or liability already acquired, accrued or incurred before thecommencement of this Act, or
(b) any legal proceeding or remedy in respect of any such right, title, interest, obligation orliability, or anything done or suffered before the commencement of this Act, or
(c) anything done or suffered before the commencement of this Act, or
(d) any enactment relating to partnership not expressly repealed by this Act, or
(e) any rule of insolvency relating to partnership, or
(f) any rule of law not inconsistent with this Act.