~All About Partnership In Business~💛

THE INDIAN PARTNERSHIP ACT,1932. DEFINES PARTNERSHIP AS AN ASSOCIATION WHERE PERSONS AGREE TO COMBINE THEIR FINANCIAL RESOURCES TO SHARE PROFIT AND LOSS EQUALLY IN AGREED RATIO AND RUN A BUSINESS BY THEIR MANAGERIAL SKILLS AND ABILITIES. PARTNERSHIP HELPS IN EXPANSION OF BUSINESS WITH MORE CAPITAL, SUPERVISION,CONTROL AND DIVISION OF WORK. THE BUSINESS IS CARRIED BY ALL OF THE PARTNER'S OR WITH ONE OF THEM ON BEHALF OF EVERYONE.

A partnership can be formed by minimum 2 partners and maximum 20 partners.

FEATURES OF PARTNERSHIP 

1)The term and condition of partnership are laid down in a document known as partnership deed.

2)A partnership can be formed only on the basis of business. Business may include any trade, industry or profession. Thus a Partnership can engage in any occupation, production and distribution of goods and services.

3)The liability of partners are unlimited. If some obligation arises then not only the Partnership assets but also the private property of the partners can be taken for the payment of the liabilities of the firm.

4)Every partner is entitled to participate in the business but it is not necessary for all the partners to participate in day to day activities of the business. Even if the business is runed by some partners on behalf of all the partners, the consent of all the partners is necessary for taking any decisions.

5)In Partnership firm no partner is allowed to transfer their shares to other person and if doing the consent of other partners is required.

6)The partnership firms continues till the pleasure of partners. Legally partnership comes to an end if any partner dies, retire or become insolvent but if the remaining partners agree to continue the business under the original firm's name, the firm will not be dissolved and will continue its business after settling the claim of the outgoing partner.

TYPES OF PARTNERSHIP

1) PARTNERSHIP AT WILL:- This partnership will come to an end whenever any partner gives notice of his intension to do so. Such partnership exists on the will of the partners.

2) PARTICULAR PARTNERSHIP:- This partnership is formed for undertaking a particular venture. It comes to an end automatically with the completion of the venture.

3) PARTNERSHIP FOR FIXED DURATION:- This partnership is fixed for 2 to 5 years or any other duration as decided by the partner.

TYPES  OF  PARTNERS

Active partners:- Are active in day to day activities of the business.

Sleeping or dormant partner:- Such partner only contribute the capital and does not take part in day to day activities.

Nominal partner:- They just lend their names to the business, they do not participate in day to day activities neither contribute any capital.

Partnership holding out:- if a person by his own or conduct to hold out to another that he is a partner, he  be prevented from denying that he is not a partner, the person who thus become liable to third parties to pay the debts of the firm's is known as a partner by holding out.

PARTNERSHIP  DEED 

1) Normally Carries the name of the business, address of its principal place and short summary of the nature of business.

2) The deed give important financial details of the partnership such as amount of capital to be invested by each partner, the profit and loss sharing of each partner, the method of distributing the business income.

3) The deed provides a accepted method for accounting of the cash flow, profit and loss, and assets and liabilities of the business. There should be a ficsal year mentioned for accounting statements and how these statements will be distributed amongst the partners.

4) The duties, power and obligations of each partner shall be spelt out in the deed.

5) The deed shall be mentioned that if a partner is to be hindrance or detriment to the business or loses legal rights in a bankruptcy or other court action, the other partner must have a method of modifying the partnership rights of or expelling him.

6) The deed shall have mentioned the method of dissolving a business if desired and how the accounts will be settled within the partner at the termination of the business.

7) As the business partnership deed must provide the mean of arbitration of disputes. The main aim of the deed is to avoid expensive litigation over details that have not been fully worked out in signed agreement.

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~All about the directors of the company~💛

DIRECTOR OF COMPANY 

Director of a company are individual who are elected for the management of the corporation related to policy and to make decisions for the major issue of the companies.The success of the company depends upon the competence and integrity of the directors of the company

TYPES OF DIRECTORS

* First director (firstly appointed director of the company within incorporation).

* Residential director ( who is resident to India).

* women director (there shall be  atleast one women director after the completion of number of paid up shares and turnover  exceed as per companies act, 2013).

* Independent director (who has no relation with the company shares).

* Alternate director (alternate director is an individual who is appointed to attend a board meeting on behalf of the director of a company where the principal director would be otherwise unable to attend).

* Additional director (who is appointed by boards of directors and can hold the company till next annual general meeting).

* Small shareholder director (if company is carrying any shareholder with small paid up share there should be atleast one small shareholder director to work for their benefits).

* Nominee director (it should be an individual who is appointed by the financial institutions, banks where such institutions have some interest in the company the interest can be in form of financial assistance, loan or investment).

APPOINTMENT

public company shall have atleast 3 directors

Maximum 15 directors

Private company shall have atleast 2 directors

Maximum 15 directors

One person company shall have atleast one directors

Maximum number can be increased by passing special resolution.

DIRECTOR IDENTIFICATION NUMBER

Every individual who tends to be appointed as a director of a company needs to file a form as prescribed under sec 153 of companies act, 2013 for the allotment of DIN (director identification number).

A director shall exercise independent judgement.

RIGHTS AND DUTIES OF DIRECTORS

To act in good faith

(Promote the object of the company for the benefit of the members)

To act as per articles of the company

(The directors shall comply in accordance with the articles of the company)

To avoid conflict of interest

( Director may not directly or Indirectly have interest to the conflicts or involve in interest of the company)

Exercise due care 

(Director shall exercise his duties with reasonable care, skill and diligence)

Duty not to make undue gain 

(A director shall not achieve, gain or take any advantage either himself or to his relatives, partners, or association. If the director found guilty under undue gain shall be liable to pay the fine amount equal to that gain to the company).

Not to assign his office

( Shall not assign his office or any assignment to any other person, if made shall be considered void).

A DIRECTOR MAY BE REMOVED FROM THE OFFICE BY GIVING SPECIAL NOTICE.

A DIRECTOR MAY RESIGN HIS OFFICE IN THE MANNER PROVIDED BY THE ARTICLES.

I hope this was helpful to you 😁🙏❤️ Thanks for reading my blog.