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Indian Partnership Act, 1932

A partnership is the relationship between persons who have agreed to share the profits of a business carried on by all or any of them acting or all. In India it is governed by the Indian Partnership Act, 1932, which extends to the whole of India except the State of Jammu and Kashmir. It came into force on 1st October 1932.


Eligibility For Partnership

A partnership agreement can be entered into between persons who are competent to contract. Every person who is of the age of majority according to the law to which he is subject and who is of sound mind and is not disqualified from contracting by any law to which he is subject can enter into a partnership.

The following can enter into a partnership

  1. Individual :
    An individual, who is competent to contract, can become a partner in the partnership firm. If there are more than two partners in a firm, an individual can be a partner in his individual capacity as well as in a representative capacity as Karta of the Hindu undivided family.
  2. Firm :
    A partnership firm is not a person and therefore a firm can not enter into partnership with any firm or individual. But a partner of the partnership firm can enter into partnership with other persons and he can share the profits of the said firm with his other co-partners of the parent firm.
  3. Hindu Undivided Family :
    A Karta of the Hindu undivided family can become a partner in a partnership in his individual capacity, provided the member has contributed his self acquired or personal skill and labour.
  4. Company :
    A company is a juristic person and therefore can become a partner in a partnership firm, if it is authorised to do so by its objects.
  5. Trustees :
    Trustees of private religious trust, family trust and trustees of Hindu mutts or other religious endowments are juristic persons and can therefore enter into partnership, unless their constitution or objects forbid.

Number Of Partners

The number of partners in a firm shall not exceed 20 and a partnership having more than 20 persons is illegal. When there is partnership between two firms, all the partners of each firm will be taken into account. If the partnership is between the karta or member of Hindu undivided family the members of the joint Hindu family will not be taken into account.


  • Restrictions On Authority Of A Partner.
  • Rights Of A Minors.
  • Dissolution Of Firm.
  • Registration Of A Firm.
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