Professional Documents
Culture Documents
III Term
Paper LB 3031 - Business Association - I
(Partnership and Agency)
Objectives of the Study
The law recognizes two types of business associations, viz. (i) company and (ii)
partnership. The law relating to partnership has gone a drastic change with the enactment of
the Limited Liability Partnership Act, 2008. The limited liability partnerships are more akin to
companies but not exactly the same. The traditional concept of partnerships with unlimited
liability, joint ownership and flexibility in registration permissible under the Indian
Partnership Act, 1932 has been drastically modified under the Limited Liability Partnership
Act, 2008. The need to have two kinds of partnerships along with registered companies
deserves to be studied by keeping in mind the rationale in retaining these three forms of
business associations.
The present course is aimed at a study of the Limited Liability Partnership Act, 2008 and
the Indian Partnership Act, 1932 in the light of judicial pronouncements. The provisions of
the Indian Contract Act, 1872 dealing with agency particularly the provisions of sections 182238 will also be covered in this course.
Prescribed Legislations:
1. The Indian Partnership Act, 1932
2. The Limited Liability Partnership Act, 2008 (6 of 2009)
3. The Indian Contract Act, 1872
Prescribed Books:
1. Sanjiv Agarwal and Rohini Agarwal, Limited Liability Partnership : Law and Practice
(2009).
2. G.C ., Bharuka, The Indian Partnership Act
(7th ed., 2007)
3. Avtar Singh, Law of Partnership (3rd ed., 2001 with supplement 2003)
4. V.P. Verma (Rev.), S. D. Singh and J.P. Gupta, Law of Partnership in India
(5th ed., 1996)
5. R.G. Padia (ed.), Pollock & Mulla, Indian Contract and Specific Relief Acts
(13th ed., 2006)
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Topic 8 Agency
Agent and Principal defined; Who may employ an agent; who may be appointed as agent;
Rights, duties and liabilities of principal and agent, scope and limitation, ratification and
revocation of authority; appointment of sub-agent (The Indian Contract Act, 1872).
58. Narandas Morardas Gajiwala v. SPAM Papammal, AIR 1967 SC 333
59. Kuchwar Lime and Stone Co. v. Dehri Rohtas Light Rly. & Co. Ltd.,
AIR 1969 SC 193
60. Lakshminarayan Ram Gopal v. Govt. of Hyderabad, AIR 1954 SC 367
61. Snow White Indl. Corpn. v. Collector of Central Excise,
AIR 1989 SC 1555
IMPORTANT NOTE:
1. The cases/topics mentioned above are not exhaustive. The teachers teaching the course
shall be at liberty to add new cases/topics.
2. The students are required to study the legislations as amended from time to time and
consult the latest editions of books.
3. The question paper shall include one compulsory question. The question papers set for the
examinations held during 2010-11 and 2011-12 are printed below for guidance of the
students.
4. (a)
Discuss the Implied Authority of a partner. How far is the firm liable for the
wrongful acts of a partner which resulted in loss to the third parties?
(b)
5. (a)
M, a minor was admitted to the benefits of partnership. The firm was dissolved
before M attained majority. C, a creditor files a recovery suit against the firm as
well as M, after M attained majority. Will he succeed against M? Discuss.
(b)
X and Y carry on the business of running a travel agency in the personal house
belonging to Y. Subsequently, they purchase some furniture jointly for the said
purpose. Should the house and the furniture be deemed to be partnership property?
6. (a)
(b)
X and Y agree to carry on partnership business. The agreement provided that the
partnership business should be terminated by mutual agreement. After the expiry of
six months X wants to dissolve the firm. Can X ask for dissolution? Discuss.
7. (a)
(b)
8. (a)
(b)
(b)
4. (a)
(b)
A firm consisting of four partners, three of the became insolvent, but the remaining
partner still carried on the business of the firm. A suit was filed for the dissolution
of the firm, whether the suit is maintainable or not. Decide.
A advanced a sum of Rs. 30,000 to the firm of X and Y. Both X and Y agreed to
carry on business subject to control of A on payment of commission of 10% out
of profits. Is A a partner in the firm. State with reasons.
Analyse the term, Implied Authority of a partner in the firm.
A and B are partners in a firm dealing in Cotton Fabrics. A without the knowledge
and consent of B secretly brides the clerk of a rival firm of C and D to obtain
some secret information pertaining to the business of the said rival firm. Is B liable
for the acts of A? discuss.
5. What are the effects of non-registration of a partnership firms? Whether a suit filed by an
unregistered firm get validity on registration during the pending of the suit? Discuss.
6. (a)
(b)
7. (a)
Four persons purchased a piece of land jointly. Subsequently a cinema hall was
constructed with their joint money. They then formed a firm to exhibit films.
Determine whether the above two properties:
(i)
piece of land
(ii) cinema hall
are the properties of the firm.
A partner purchasing the property with the friends of the firm did not obtain the
consent of the other partners as required by the Partnership deed. Will it be the
property of the firm? Comment.
(b)
8. Partners are bound to carry on business of the firm, to the greatest common advantage,
advantage, to be just and faithful to each other and to vender time accounts and full
information if all things affecting the firm to any partner or his legal representative.
Discuss the above duties vis--vis the rights in a partnership firm?
*****
LL.B. III Term Supplementary Examinations, June-July, 2012
Note: Answer any five questions. All questions carry equal marks.
1. Attempt any two of the following:
(a) Distinguish between Partnership firm and Hindu Joint Family
(b) Effect of non registration of a partnership firm
(c) Retirement of a partner
2.
3.
(a)
Post Cox v. Hickman (1860) 8 HLC 268 has added a new dimension of the
concept of partnership by agreeing that sharing of profits is only a prima-facie
evidence of existence of partnership while conclusive test is that of mutual
agency. Comment.
(b)
X advanced Rs. 30,000/- to the firm of A&B. Both A & B agreed to carry on
business subject to control of X in any respects including the payment of
commission of 10% out of profit.
(a)
(b)
information of all things affecting the firm or any partner or his legal
representative.
A, B & C are partners in a firm. A with consent of B only transferred his interest
in the firm to X. What are rights of X against C?
4.
(a)
Generally a person who is not a partner in the firm can not be made liable for an
act of the firm.
Discuss with case law where the liability of a non partner can arise as a partner.
5.
What are grounds on which a court can order for dissolution of a partnership firm. Does
dissolution result in winding up of partnership.
6.
Who may be an agent? What are his rights, duties and liabilities? How the agency can be
terminated?
7.
What are the need of Passing limited liability Partnership Act, 2008.
Distinguish between a company and limited liability partnership?
8.
(b)
(c)
Business Association I
FACULTY OF LAW
UNIVERSITY OF DELHI, DELHI- 110 007
July, 2012