Partnership Act, 1866 [Repealed]
(Received the assent of the Governor-General on the 23rd March 1866.)
An Act to amend the Law of Partnership in India.
PREAMBLE
Whereas it is expedient to amend the Law relating to Partnership; It is enacted as follows:
Section 1. Lender not a partner by advancing money for share of profits
The advance of money by way of loan to a person engaged or about to engage in any trade or undertaking upon a contract in writing with such person that the lender shall receive a rate of interest varying with the profits, or shall receive a share of the profits arising from carrying on such trade or undertaking, shall not, of itself, constitute the lender a partner with the person or the persons carrying on such trade or undertaking, or render him responsible as such.
Explanation. A person who being entitled, whether as a retiring partner or otherwise, to demand and receive present payment of the, value of any share or interest of or in the capital or other funds of a business shall, after the value thereof shall have been ascertained between such person and the person or persons liable to pay the same, agree in writing to allow the same to remain therein or to be used by such person or persons for the purposes of shall business, shall be construed to make an advance of money by way of loan within the meaning of this Section.
Section 2. Remuneration of agents, & c., by profits not to make them partners
No contract for the remuneration of a servant or agent of any person engaged in any trade or undertaking by a share of the profits such trade or undertaking shall, of itself, render profits such servant or agent responsible as a partner therein, nor give him the rights of a partner.
Section 3. Certain annuitants not to be deemed partners
No person being the widow or child of the deceased partner of a trader, and receiving by way of annuity a portion of the profits made by such trader in ins business, shall, by reason only of such receipt, be deemed to be a partner of or to be subject to any liabilities incurred by such trader.
Section 4. Receipt of profits, & c., not to make the seller a partner
No person receiving by way of annuity or otherwise a portion of the profits of any business, in consideration of the sale by him of the good-will of such business, shall, by reason only of such receipt, be deemed to he a partner of, or he subject to, the liabilities of the person carrying on such business.
Section 5. Interpretation of person.
In the construction of this Act, the word person shall include a Partnership Firm, a Joint Stock Company, and a Corporation.