Partnership Deed Video Lecture - Commerce

features of partnership now these are
almost the same features that we have
done and these are derived from the
definition itself so you will find it
almost like a repetition of the
definition so let's see first of at
least two persons I have already
explained you that to you know to form a
partnership you need at least two
persons one person cannot form a
partnership batters a sole
proprietorship there is an agreement and
open 2 percent 3 percent 5 persons are
doing something together nothing needs
to be an agreement between them because
now all the persons on earth are
different no two people are saying you
know they mentality they identity their
method of work you know their thinking
their thoughts
everything is different so to accomplish
a task to do something together there
needs to be an agreement between them so
there is always an agreement between the
partners now that agreement may be oral
or return that is a different matter but
there has to be an agreement as to what
as to the profit sharing ratio what
would be the profit sharing ratio what
would be the business in case of
disputes how would the disputes be
solved what would be the rate of
interest on capital what would be the
rate of interest on drawings what is the
maximum amount of flow on start you know
each partner can take from the firm what
is the maximum amount of loan that the
form can contract from others these are
some issues that can only lead to
dispute so before going there these
there are partners try to sit down and
agree on various things so there has to
be an agreement between them so they
agree on the sharing of profits but
profits have to come only when there is
some business is in existence without
business they cannot be prophets so
conducting or doing a business together
is also one of the features of
partnership form but there has to be
some business unless and until there is
a business there can be no partnership
form
I mean you know if you open an NGO which
is a non profit making organization I'm
sorry that cannot be called as the
partnership form you know if you open a
charitable trust if you open a
charitable organization which works for
social cause a social benefit it cannot
be said that it is a partnership form so
partnership form has to have a business
now that business may be of textiles may
be of computers you know maybe of
after-sale services and automobiles may
be of spare parts of automobiles may be
of stationery may be of anything paper
you know garments umbrellas anything but
there has to be some business now this
business means you know it also includes
the word services you know if you are
engaged in providing you know IT
services if you engage in providing you
know services of lawyers if you're
engaged in providing services of doctors
if you are engaged in providing services
of Chartered Accountants
now if you are engaged in providing
after-sale services or you know TVs or
electronics or computers you know to
engage in providing services after sales
services for automobile now these are
all our services you know there is no
product that is being in danger yet
these all are also covered
winces definition was made it was in
1932 at that time service industry was
not that Kevlar
so only business was regarded with
importance yet it includes the word
services today since services are having
a greater importance in the economy this
becomes all the more relevant that
services are included in this
so existence of business also includes
existence of services next is sharing of
profits I've already told you when two
or three persons are doing some business
together they have to share the profits
from the business one person cannot say
I'll take all the profits the other two
will then not be with him in his
business they will part their ways so
this is the driving force of coming
together you know the partners come
together to do the business and
ultimately to have a share of the
profits so there has to be some profit
sharing ratio now many times the
partners not expressly agree on the
profit sharing ratio as to you know if
there are three partners they may say we
will share the profits equally in the
ratio 1 is to 1 is to 1 or we may share
it in the ratio 3 is to 2 is to 1 or 2
is to 2 is to 1 whatever the ratio they
agree on you know they'll share the
profits in that ratio you know the other
times the partners may not be expressed
in this regard so when they are silent
then there is no agreement regarding the
profit sharing ratio that means they
share the profit equally so there will
be an equal share of profits among the
partners ok and finally we have mutual
age
now I've already told you mutual agency
needs you know this one partner who's
the agent of other partners at the same
time those other partners are also his
agent so let's say we have a firm
wherein there are three partners a B and
C now this means that a is these agent
this also means is C's agent again B is
is agent B is also sees agent and
finally C is is agent and see this B's
agent also so everybody is everybody
else's agent so now when B is is agent
if I take if I consider this leg here
you can see that B is is agent this
means B is the agent and it is the
principal at the same time when you
consider the lower leg wherein is the
agent of B now this means that a is the
agent of B and B this is principal so if
we take these two persons
this means that B is the agent as well
as the principal of a at the same time B
now a is the agent as well as the
principal of B so you know this one
partner is agent of all the other
partners thus all the other part
has become his principle at the same
time all the other partners are his
agents so he becomes a principle of all
the other partners also so this relation
amongst the partners is called as mutual
agency the result of this relation is
every partner is able to find the other
partners by his acts whatever at one
partner does becomes a binding on the
form if one partner sells the goods to
outsiders
that means the form has sold the goods
if one partner purchases the goods from
outside of that means all the partners
have purchased the goods the form has
purchased the goods and now it is the
liability of the form to pay to the
supplier or the creditor so neutral
agency has that binding effect on all
the partners now this is the feature
that probably is not present in any of
the forms of organization you know be it
a company be its sole proprietorship be
it HUF be it a cooperative society you
know be it a trust the joint venture of
you know Co ownership this feature is
not present in any other form of
organization in a in any other form of
business this is you know a domain of
partnership only so we say that mutual
agency defines partnership mutual agency
is the true test of partnership okay