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What are Rights of Partners under the Indian Partnership Act, 1932?
The law of partnership in India is dealt with under the Indian Partnership Act, 1932. The general rights of partners are noted below.
1) Right to take part
Section 12(a) of the Act states that every partner in a partnership has a right to take part in business. He must know what is happening in the business and he can put his efforts in the business. He has the rightto take active part in the daily business of the firm.
2) Right to opine
Every partner can tell his opinion when a difference in the ordinary matters connected with the business arises. Such matters has to be decided by the majority of the partners. In such a circumstance, the opinion of each partner counts and no one to be excluded. Section 12(c) of the Act deals with this right.
3) Right to access and inspect
Every partner has a right to have access to and to inspect and copy any of the books of the firm. This is stated under Section 12(d) of the Act.
4) Right to profits
Every partner in the firm is entitled to share the profits equally. The partnership is all about contribution from all the partners. Individual performance of any partner may be rewarded with the quantum of the work infused by him, by way of salary, commission etc. But in the share of profits, every partner has equal rights. Section 13(b) deals with this right of a partner.
5) Right to interest on additional capital
Section 13(d) deals with the right of taking interest on additional payment by a partner. Every partner is entitled to six per cent interest on additional amount contributed by him beyond the amount of capital he has agreed to subscribe.
6) Right to get indemnified
Section 13(e) of the Act deals with this right. The partnership firm shall indemnify a partner in respect of payments made and liabilities incurred by him for the firm. The partnership business is all about common liability and understanding.
7) Right to represent
Every partner has the implied authority to act as the agent of the firm. But he cannot do any things he wanted using the implied authority. This will be dealt in detail in another post.
8) Right to act in emergency
Every partner can do all such acts for the purpose of protecting the firm from loss in an emergency. This is his right and no one can curtail it. In fact, if such a right is curtailed, there is no meaning in partnership to be so called.
9) Right to object
Every partner have a say in the matter of admission of new partners in to the firm. They have a right to object the admission of a new partner.
10) Right not to be expelled
Section 33 of the Act specifies a partner's right against expulsion by any majority of partners. However, he can be expelled in exercise of good faith or as per the powers conferred by the contract between the partners either by the partnership agreement or by a resolution.
11) Right to get repaid
In the event of dissolution of a partnership, a partner shall be entitled to repayment of premium amount or part thereof which he paid on entering into the partnership.
12) Right to retire is also a specific right of a partner.
13) Apart from the specific rights, each partner enjoys some common rights in the matters requiring consent of all partners. The rights of a partner can also be decided vide partnership agreement or by resolution.
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