Explain Various Duties of Partner?
Explain various duties of partner?
The duties of partners in the conduct and management of the affairs of the partnership are contained on its partnership deed. However if on any point, the deed is silent, then the relevant rule of partnership act, 1932, will apply.
Definition of partner
“The person who enter into partnership through agreement is known as partner”
Duties of the Partner
General duties of partner
Section 9 of the partnership act describes the general duties of partners as under:
“Partners are bound to carry on the business of the firm to the greatest common advantages, to be just and faithful to each other and render the true account and full representative”.
All the duties of partners arise from the principle of good or faith which is to be all and end all of partnership the duties are describes in section 9, 10, 12, & 13 of partnership act are described as follows:
Duty to work diligently
Every partner must use his knowledge and skill for the benefit of the firm. He must conduct the business with the best of his ability and secure maximum benefits for the firm.
Duty to work for common advantage
It is the duty of every partner that he must work for the best common advantage of all the other partners. In this way mutual trust and confidence is created among all the partners.
Duty to just and faithful
Every partner must be just and faithful following his co-partners. He must observe utmost good faith and fairness towards other partners of the firm.
Duty to share loss
Every partner of the firm is responsible to share equally any loss incurred by the business of the firm business of the firm in the absence of any agreed ratio.
Duty to provide information
Every partner must give full information about the firm to his co-partners. A partner being an agent of other partners must not conceal any information concerning the firm from other partners.
Duty to provide information of secret profits
A partner should not make any secret profit by way of commission. Such act becomes cause of quarrel between partners and in this way partnership comes to an end.
Duty to work without remuneration
In the absence of agreement every partner must conduit the business activity without any remuneration i.e. salary or commission in the form of goods.
Duty to indemnity for frauds
Duty to indemnity for willful neglect
According to section 13(1), if the firm suffers any loss due to willful negligence by any partners, the partner concerned must compensate the firm and other partners.
Duty not to use firm’s property
A partner must not employ the firm property for his personal use or benefits.
Transfer of share
No one can transfer his share in the firm to another person without the mutual consent of all the partners of the firm, with the aim of making him partner in the firm.
Duty not to start any other business
A Partner should not engage in any business, either openly or secretly, without the consent of his co-partners which competes the partnership business.
Duty to return profit
The property of the firm is the property of all partners. If any partner earns any profit by using the property or name of the firm or from the business connected with the firm or from the business connected with the firm, he shall be bound to return such profit to the firm.
Duty to act within authority
Every partner must act within his authority given to him.