to carry on competing business No partner can carry on a competing business. If he does so, he should surrender to the firm all profits earned by him in such business. No partner is allowed to earn secret profit. ix.
Duty to act within scope of his authority A partner must act within the scope of his authority. x. Duty to consult other partners before assigning or transferring his interest in partnership No partner can assign or transfer without the consent of all other partners his interest in the firm to any other person so as to make him a partner thereof. .
Liabilities of Partner i. Joint and Several liabilities Every partner is jointly and severally liable for all acts of the firm. It means that in case the assets are inadequate for meeting the claims of creditors, even their personal properties should be made available. The creditors can recover their claims from all the partners.
ii. Liable for any loss to third party The firm is liable for any loss caused to a third party because of a wrongful act done in the ordinary course of business. It means that every partner is liable. iii.
Liability to third party to make good the loss Where a partner receives money or property from a third party on behalf of the firm and misappropriates it, then the firm is liable to make good the loss. Types of Partnership i. Partnership at will Partnership formed to carry on business for an undefined period is called partnership at will. In other words, no time-limit is specified for the continuance of the firm.
It is to be dissolved when a partner gives notice of his intention to dissolve the partnership. Thus this type of partnership continues its business activities as long as there is mutual cooperation and confidence among partners. Since it comes to an end at the will of any partner on his giving notice, it is called partnership at will. ii.
Partnership for a fixed term Where a partnership is formed for a definite period of time, it is known as