Definition, Meaning and Nature of Partnership: Jaiib/DBF Paper 3 (Module D) Unit-10

Definition, Meaning and Nature of Partnership: Jaiib/DBF Paper 3 (Module D) Unit-10

Dear bankers,

As we all know that is Definition, Meaning and Nature of Partnership for JAIIB Exam. JAIIB exam conducted twice in a year. So, here we are Definition, Meaning and Nature of Partnership (Unit-10), Commercial Laws with Reference to Banking Operations (Module D), Legal & Regulatory Aspects of Banking -Paper 3.

♦Definition, Meaning and Nature of Partnership

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’s name.

Partnership is the result of an agreement between the persons joining together to do some lawful business.

  • The contract between the partners may be oral or written.
  • The partnership must be formed to carry on some lawful business.
  • The business must be carried on to earn and share the profits and returns of the business.
  •  There must be a mutual relation of ‘agency’ between the partners.

Types Of Partnership

  • Partnership at will: Where no provision is made by a contract between the partners for the duration of their partnership or for the determination (i.e. the termination or end) of the partnership. the partnership is known as ‘partnership at will’
  • Partnership for a fixed period: When two or more persons enter into a partnership agreement for a fixed period of time, it is known as a partnership for a fixed term
  • Particular partnership: Such partnership is entered into, for completing a particular job or assignment taken up by two or more persons jointly and to share the profits arising there from.

♦Limited Liability Partnership (LLP)

The framework of law and rules dealing with limited Liability Partnership (LLP) are contained in the Limited Liability Partnership Act, 2008 (the LLP Act) and the limited liability Rules, 2009 (the LLP rules). Limited Liability Partnership Act, 2008 come into effect by way of Notification dated 31st March 2009.

The Salient Feature of Limited Liability Partnership Act, 2008

  • LLP shall be a body corporate and a legal entity separate from its partners.
  • The Mutual rights and duties of partners of the LLP and those of the LLP shall be governed by an agreement between the Partners, subject to the provisions of the Act.
  • No Partner would be liable on account of the independent or unauthorized actions of other partners or their misconduct.
  • Every LLP shall have two partners
  • Central Government shall have powers to investigate the affairs of a LLP, if required, by appointment of competent inspector, for the purpose.
  • Indian Partnership Act, 1932 shall not be applicable to LLPs.

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