Elements of Law relating to Partnership and Limited Liability Partnership

A set of vocabulary flashcards covering key terms and definitions related to partnership law and limited liability partnerships.

Partnership

The relation between persons who have agreed to share the profits of a business carried on by all or any of them acting for all.

Indian Partnership Act, 1932

Legislation that governs partnerships in India, providing essential provisions and regulations.

Essentials of Partnership

The four key elements that must be present for a partnership: two or more persons, an agreement to conduct business, profit sharing, and mutual agency.

Types of Partners

Includes actual (active) partners, sleeping (dormant) partners, nominal partners, partner in profits only, sub-partners, and partners by estoppel.

Dissolution of Partnership

Termination of the relationship between the partners in a partnership, can occur through mutual agreement, compulsory dissolution, or notice.

Partner by Estoppel

A person who is represented as a partner and is liable for the acts of the firm due to misrepresentation.

Sleeping Partner

A partner who contributes capital and shares profits but does not play an active role in the management of the business.

Minor's Rights in Partnership

A minor can only be admitted to the benefits of partnership with consent of all partners, but cannot be a full partner.

Mutual Agency

The principle where each partner acts as both an agent and a principal for the other partners.

Limited Liability Partnership (LLP)

A partnership structure that limits liability for partners for the actions of the partnership, allowing them to manage the business directly.

Firm Name

The name under which a partnership business is conducted, which must not mislead the public.

Actual Partner

A partner who actively participates in the management of the business and shares its profits and losses.

Nominal Partner

A partner who lends their name to the business but does not contribute capital or participate in management.

Partnership Deed

A written agreement that outlines the rights, responsibilities, and obligations of partners in a partnership.

Continuing Authority

The authority of partners to act on behalf of the firm after dissolution for the purposes of winding up.

Indemnity of Partners

Partners are entitled to be indemnified by the firm for expenses incurred in the course of business.

Dissolution by Court

A situation where a court can order the dissolution of a partnership due to various grounds such as permanent incapacity or misconduct of a partner.