Chapter – 3 Mutual relation of Partners

Chapter – 3 Mutual relation of Partners
12. Mutual relation of partners :

(1) The mutual rights and duties of the partners in partnership firm shall be determined by an agreement made
between the partners. Such agreement may be in an express form or may be implied in the course of mutual dealing.
(2) The agreement of partnership, if any, governs the provisions of partnership and in a condition where there is no such agreement; the Sections from 13 to 26 shall be applied to the partnership.

13. Assets of partnership : The entire assets of the partnership shall be as follows;
(a) The all assets originally brought in to the stock of the firm,
(b) Assets acquired by or for the firm or for the purpose or in the course of business of partnership,
(c) Property earned by the firm in the course of business; and
(d) Good will of the business carried on by the partnership.
Explanation : Except otherwise provided by the context, all property and rights and interest in property acquired with money belonging to the firm shall be deemed to have been acquired for the firm.

14. Use of property of the partnership : No Partners shall use or cause to use the property of the partnership firm for any other purpose other than the purpose of the partnership business.

15. No compulsion for additional capital : No partner shall be compelled to add more capital than the amount prescribed in the agreement of partnership deed despite the request of other partners.

16. No substitution of partners : No partner shall, without the consent of all other partners, make or keep to any other person as a partner in the firm instead of him/her.

17. Every partner may participate in the business :

(1) Except a partner
who is prohibited to take part in the management of partnership pursuant to the agreement, every partner shall be entitled to participate in the management of the business of the firm unless other partner opposes it.
Provided that, without the consent of all the partners no act which is not related with the business of a firm shall be performed under the name of  partnership.
(2) If the partners enter in to an agreement to perform all or any act of the partnership by all partners or by two or more than two partners jointly and if such partners are unable to perform the assigned task due to a
reasonable reason, they may authorize to a partner among themselves.

18. Entitlement to have access to and to copy of the account and books of the firm : Every Partner shall be entitled to have access to the account and books of the firm and if a partner intends to get a copy of it the
partner who holds such book and document shall prepare a copy of original document and provide to such partner upon putting his/her signature.

19. Remuneration and interest :

(1) Every partner shall be entitled to receive remuneration as specified in the agreement for managing the
business of the firm and if the partner has invested additional capital than he/she has agreed to subscribe, under the agreement he/she shall be entitled to receive an interest not exceeding Ten percent.
(2) If a partner, knowingly or negligently causes any loss or damage, he/she shall be liable to pay back the values or amount of such loss or damage.

20. Profit derived by the partner to be the property of firm : If a partner derives any profit for him/her from any transaction of the firm, or from the use of the property or business connected with the firm or in the name of
the firm he/she shall account for that profit and pay it to the firm.

21. The amount paid by the partners shall be mentioned in the account : The amount paid by the partners pursuant to Section 19 and 20, shall be clearly mentioned in the profit and loss account of the fiscal year of
the firm.
22. Share of profit and loss : (1) In the course of sharing the profit and loss between/among partners it shall be shared in a manner as referred to in the agreement, if any and it shall be shared on the prorata basis if such
provision does not exist in the agreement.
(2) Where there is an agreement between/among partners in respect of interest on the capital subscribed by a partner in the course of promoting of the partnership, such an interest shall be paid only out of the profit.

23. No entitlement to profit : If a partner fails to pay the capital to be  subscribed by him/her to the firm, he/she shall not be entitled to receive his/her profit until he/she pays the said capital