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Contents INDIAN PARTNERSHIP ACT, 1932 PAGE
CHAPTER I PRELIMINARY 1. Short title, extent and commencement
1
2. Definitions
2
3. Application of provisions of Act 9 of 1872
2
CHAPTER II THE NATURE OF PARTNERSHIP 4. Definition of “partnership”, “partner”, “firm” and “firm name”
3
5. Partnership not created by status
4
6. Mode of determining existence of partnership
4
7. Partnership at will
5
8. Particular partnership
6 CHAPTER III
RELATIONS OF PARTNERS TO ONE ANOTHER 9. General duties of partners
6
10. Duty to indemnify for loss caused by fraud
7
11. Determination of rights and duties of partners by contract between the partners
7
I-5
CONTENTS
I-6 PAGE
12. The conduct of the business
8
13. Mutual rights and liabilities
8
14. The property of the firm
9
15. Application of the property of the firm
9
16. Personal profits earned by partners
9
17. Rights and duties of partners
10
CHAPTER IV RELATIONS OF PARTNERS TO THIRD PARTIES 18. Partner to be agent of the firm
10
19. Implied authority of partner as agent of the firm
11
20. Extension and restriction of partner’s implied authority
11
21. Partner’s authority in an emergency
11
22. Mode of doing act to bind firm
12
23. Effect of admissions by a partner
12
24. Effect of notice to acting partner
12
25. Liability of a partner for acts of the firm
12
26. Liability of the firm for wrongful acts of a partner
12
27. Liability of firm for misapplication by partner
12
28. Holding out
12
29. Rights of transferee of a partner’s interest
13
30. Minors admitted to the benefits of partnership
13
CHAPTER V INCOMING AND OUTGOING PARTNERS 31. Introduction of a partner
16
32. Retirement of a partner
16
33. Expulsion of a partner
17
34. Insolvency of a partner
18
35. Liability of estate of deceased partner
18
36. Right of outgoing partner to carry on competing business
19
37. Right of outgoing partner in certain cases to share subsequent profits.
19
38. Revocation of continuing guarantee by change in firm
20
I-7
CONTENTS PAGE
CHAPTER VI DISSOLUTION OF A FIRM 39. Dissolution of a firm
20
40. Dissolution by agreement
20
41. Compulsory dissolution
20
42. Dissolution on the happening of certain contingencies
21
43. Dissolution by notice of partnership at will
21
44. Dissolution by the Court
21
45. Liability for acts of partners done after dissolution
22
46. Right of partners to have business wound up after dissolution
22
47. Continuing authority of partners for purposes of winding up
22
48. Mode of settlement of accounts between partners
23
49. Payment of firm debts and of separate debts
24
50. Personal profits earned after dissolution
24
51. Return of premium on premature dissolution
24
52. Rights where partnership contract is rescinded for fraud or misrepresentation
24
53. Right to restrain from use of firm name or firm property
24
54. Agreements in restraint of trade
25
55. Sale of goodwill after dissolution
25
CHAPTER VII REGISTRATION OF FIRMS 56. Power to exempt from application of this Chapter
25
57. Appointment of Registrars
25
58. Application for registration
26
59. Registration
32
60. Recording of alterations in firm name and principal place of business
36
61. Noting of closing and opening of branches
38
62. Noting of changes in names and addresses of partners
38
63. Recording of changes in and dissolution of a firm
39
64. Rectification of mistakes
40
65. Amendment of Register by order of Court
41
66. Inspection of Register and filed documents
41
CONTENTS
I-8 PAGE
67. Grant of copies
41
68. Rules of evidence
41
69. Effect of non-registration
42
70. Penalty for furnishing false particulars
45
71. Power to make rules
46 CHAPTER VIII SUPPLEMENTAL
72. Mode of giving public notice
48
73. [Omitted by the Repealing Act, 1938]
48
74. Savings
49
SCHEDULE I Maximum Fees
49
SCHEDULE II [Repealed by the Repealing Act, 1938]
55
SUBJECT INDEX
57
SAMPLE CHAPTER
Indian Partnership Act, 1932 [9 OF 1932]1 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:— CHAPTER I PRELIMINARY Short title, extent and commencement. 1. (1) This Act may be called the Indian Partnership Act, 1932. [(2) It extends to the whole of India 3[***].]
2
(3) It shall come into force on the 1st day of October, 1932, except section 69, which shall come into force on the 1st day of October, 1933. STATE AMENDMENTS DADRA AND NAGAR HAVELI Section 1(3)
Substitute the following: “(3) It shall come into force at once except section 69 which shall come into force on the 1st day of July, 1966.”— [Vide Dadra and Nagar Haveli (Laws) Regulation, 1963, w.e.f. 1-7-1965] GOA, DAMAN AND DIU Section 1(3)
Substitute the following: “(3) It shall come into force at once except section 69, which shall come into force on the 1st day of January, 1965.” — [Vide Goa, Daman and Diu (Laws) No. 2 Regulation, 1963, w.e.f. 19-12-1963.] 1. Dated 8-4-1932. 2. Substituted by the Adaptation of Laws Order, 1950. 3. Words “except the State of Jammu and Kashmir” omitted by the Jammu and Kashmir Reorganisation Act, 2019, w.e.f. 31-10-2019.
1
S. 3
INDIAN PARTNERSHIP ACT, 1932
2
LACCADIVE, MINICOY AND AMINDIVI ISLANDS Section 1(3)
Substitute the following: “(3) It shall come into force at once except section 69, which shall come into force on the expiry of a period of one year from the date of commencement of the rest of this Act”. [Vide Laccadive, Minicoy and Amindivi Islands (Laws) Regulation, 1965, w.e.f. 1-10-1967.] PONDICHERRY Section 1(3)
Substituted the following: “(3) It shall come into force at once except section 69, which shall come into force on the 1st day of July, 1964.”— [Vide Pondicherry (Laws) Regulation, 1963, w.e.f 1-10-1963.]
Definitions. 2. 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 of the 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 a partner in the firm; and (e) expressions used but not defined in this Act and defined in the Indian Contract Act, 1872 (9 of 1872), shall have the meanings assigned to them in that Act. STATE AMENDMENT MAHARASHTRA Section 2
After clause (c), insert the following clause: ‘(c-1) “Registrar” means the Registrar of Firms appointed under sub-section (1) of section 57 and includes the Deputy Registrar of Firms and Assistant Registrar of Firms appointed under sub-section (2) of that section;’— [Vide Indian Partnership (Maharashtra Amendment) Act, 1984, w.e.f. 1-1-1985]
Application of provisions of Act 9 of 1872. 3. The unrepealed provisions of the Indian Contract Act, 1872, save in so far as they are inconsistent with the express provisions of this Act, shall continue to apply to firms.
3
INDIAN PARTNERSHIP ACT, 1932
S. 4
CHAPTER II THE NATURE OF PARTNERSHIP Definition of “partnership”, “partner”, “firm” and “firm name”. 4. “Partnership” is 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. Persons who have entered into partnership with one another are called individually “partners” and collectively a “firm”, and the name under which their business is carried on is called the “firm name”. COMMENTS SECTION NOTES
Definition of “Partnership” The essential ingredients of “partnership” are as follows: Relation: It is the relation arising from the contract (See Section 5). Two or more Persons: Such a contractual legal relation is between persons (Note: ‘persons’
in plurality-two or more persons). Such persons are individually known as “partners” and collectively known as “firm”. [See also Section 5 and Section 6]. Profit-sharing agreement: Such persons have agreed to share the profits of a business.
[See also Explanation 1, and Explanation 2, below Section 6] Business: The profits shared are from a business. “Business” includes every trade,
occupation and profession. [See Section 2(b)] Mutual agency: Such business is carried on by all or any of them acting for all. (See
Section 6 & Section 18) Firm Name: The name under which their business is carried on is called the “firm name”.
CASE LAWS Proprietary
Concern Not a Partnership - The Supreme Court clarified that a proprietary concern is distinct from a partnership as defined under section 4 of the Indian Partnership Act, 1932. A proprietary concern, owned solely by an individual, cannot be equated with a partnership, which requires an agreement between two or more persons to share profits. The judgment emphasized that proprietary businesses are not governed by partnership laws and are solely the responsibility of the proprietor.—Raghu Lakshminarayanan v. Fine Tubes AIR 2007 SC 1634.
Partnership Restricted to Individuals - The Supreme Court held that under section 4,
a partnership can only be formed by individuals and not by an HUF or other collective entities. An HUF, being a fluctuating body of individuals, cannot enter into a partnership directly or through a nominee. The Court clarified that any payment to a partner, even if they represent an HUF, is treated as payment to the individual partner for legal purposes, and such arrangements cannot alter the firm’s structure or obligations under the Act.—Rashik Lal and Co. v. Commissioner of Income-tax AIR 1998 SC 401. Firm is Not a Legal Person - The Supreme Court ruled that under section 4, a “firm”
is not recognized as a legal person and cannot enter into a partnership with another firm, a Hindu Undivided Family (HUF), or an individual. The term “persons” in the Act refers to natural or artificial legal persons, and a firm does not qualify as such. Consequently, a partnership purportedly constituted between firms or HUFs is invalid,
INDIAN PARTNERSHIP ACT 1932 – BARE ACT WITH SECTION NOTES AUTHOR : PUBLISHER : DATE OF PUBLICATION : EDITION : ISBN NO : NO. OF PAGES : BINDING TYPE :
Taxmann's Editorial Board Taxmann December 2025 2026 Edition 9789371264556 68 Paperback
Rs. 125 DESCRIPTION Indian Partnership Act 1932 [Bare Act with Section Notes] by Taxmann offers a concise and authoritative consolidation of India's partnership law. The 2026 Edition presents the complete and amended statutory text, supported by clear, section-wise notes that explain legislative intent, judicial interpretation, State-specific amendments, and practical application, making it a reliable reference on both substantive and procedural aspects of partnership law. This book is intended for the following audience: • Law Students & Academicians • Legal Professionals • Business Owners & Chartered Accountants • Judicial & Quasi-Judicial Authorities The Present Publication is the 2026 Edition, covering the amended and updated text of the Indian Partnership Act [Act No. 9 of 1932], with the following noteworthy features: • [Bare Act with Section Notes] Verbatim statutory text with succinct section-wise notes and references to leading judicial decisions • [Updated State Amendments] Incorporates State-specific amendments relevant across jurisdictions • [Pre-amendment Provisions] Includes earlier versions of amended provisions through foot notes for transitional understanding • [Judicial Interpretation] References to key Supreme Court and High Court rulings on partner ship law • [Procedural Guidance] Coverage of registration, effect of non-registration, admission of minors, retirement, expulsion, insolvency, and settlement of accounts • [User-friendly Presentation] Clear chapter-wise arrangement, structured notes, State Amendment blocks, and a detailed Subject Index
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