What are the Rights and Duties of Partners in Business
Rights and Duties of Partners is written in partnership deed,If there is written partnership deed, rights and duties of partners will be in accordance to it. In the nonexistence of partnership deed, mutual rights and duties of partners are governed by partnership act 1932. According to partnership act, the rights and duties of partners are as follows:
Rights of Partners
Right to Express Opinion: Every partner has right to express his opinions and give assistance to other partners for the benefits of business. These opinions and guides may be accepted or rejected by the other partners. But, no major business decisions can be taken without the consent of all the partners.
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Right to Take Part in Management: Every partner has the right to take energetic part in the management and operation of the business of the firm.
Right to Examine and Take Copies of Accounts; Every partner has right to review the books of accounts of the firm. They can also obtain copies of account.
Right to Share Profit; Every partner right to share the profit of business. They can share the profit equally or in the agreed ratio mention in partnership deed or any written agreement.
Right to Property: Every partner has right to use the property of the partnership firm for the benefit of the firm. They should not use the business property for their personal purposes.
Right to have Interest: Partners cannot demand any interest on their capital investment. But they have right to get up to 10% interest on loans and advances made by them to the partnership firm.
Right to Leave the Firm; Every partner has right to leave the firm with the consent of other partners.
Right to be Reimbursed; Every partner is entitled to get compensation from the partnership firm is respect of liabilities incurred and payment made by him. He should also be compensated for the losses caused by other partners.
Right to Ownership: Every partner has right on the property of the firm. Thus, property of the firm cannot be sold by one partner without the consent of other partners.
Right to Dissolve: A partner has the right to dissolve the partnership with the consent of all partners. Even, if other partners refuse then also he can dissolve the partnership by informing other partners.
Duties of Partners
To Work Loyally: Partnership is based on mutual trust and confidence of the partners. It is the duty of every partner to be honest and loyal to other partners as well as to the firm.
To share Losses: In case of loss, it is the duty if every partner to bear the loss equally or in the profit sharing ratio.
To Compensate: It is the duty of every partner to compensate the losses or damage to the firm or to others due to his negligence or deliberate misconduct.
To Work Without Compensation; Partnership is operated either by all partners or by any of them acting for all. It is the duty of every partner to work in the firm without charging and expecting remuneration. However, the partner can demand remuneration if it is mentioned in the agreement.
To Maintain Current Account : It is the duty of every partner to maintain proper and correct books of accounts, so that they may give true and fair view of the business.
Not to Run Competitive Business : A partner should not make any secret profit by way of commission from the partnership business. In the same way, the property of the firm including goodwill should not be used for personal purposes.
To Act Within Authority : It is the duty of every partner to act within the scope of the authority entrusted to him.