Partners are bound to carry on the business of the firm to greatest common advantage, to be just and faithful to each other, and to render true accounts and full information of all things affecting the firm to any partner, his heir or legal representative. Subject to the contract between the partners, the property of the firm shall be held and used by the partners exclusively for the purposes of the business. Where no provision is made by contract between the partners for the duration of their partnership, or for the determination of their partnership, the partnership is “partnership-at-will”.
The partners can bring a fund as capital. The profit is shared based on the capital brought by the Partners.
Partners can share the responsibility of the running of the business. This will allow them to make the most of their abilities. Rather than splitting the management and taking an equal share of each business task, they might well split the work according to their skills. So if one partner is good with figures, they might deal with the book keeping and accounts, while the other partner might have a flare for sales and therefore be the main sales person for the business.
A partnership is generally easier to form, manage and run. They are less strictly regulated than companies, in terms of the laws governing the formation and because the partners have the only say in the way the business is run (without interference by shareholders) they are far more flexible in terms of management, as long as all the partners can agree.
Partners share the decision making and can help each other when they need to. More partners mean more brains that can be picked for business ideas and for the solving of problems that the business encounters.
Any partner can file a case against partner or Firm in case any dispute arises between the partners. This power is not available in unregistered Firm.
The partners of a Firm can file a case in court against any third parties e.g to recovery the price of the goods supplied. Unregistered Firm cannot file suit against third party.
A registered Firm can be set off the amount payable to third party and amount receivable from third party. Such a power not available in unregistered partnership Firm
Although on the death of a partner a firm is dissolved, but if the other partners so agree the firm may not be dissolved [Sec. 42 (c)]. Where a firm is not dissolved, the estate of a deceased partner is not liable for any act of the firm done after his death. His estate is liable only for liabilities undertaken during his life time. No public notice of death is required to relieve the deceased partner’s estate from future liabilities.
It is important to note that the provisions of Section 36 (Restrictions imposed on retiring partner) and Section 37 (Right of retiring partner to share subsequent profits in certain cases), which have been discussed under the heading ‘Retirement of a Partner,” are also applicable when partner ceases to be a partner by expulsion, insolvency or death.