Forming a partnership.
The Indian Partnership Act, 1932 regulates the law relating to partnership in India. Partnership is the relation between persons who have agreed to share the profits of a business carried on by all or any of them acting for all. The persons who have entered into partnership with one another are called individually ”partners” and collectively a “firm” and the name under which their business is carried on is called the “firm name.” The relation of partnership arises from contract and not from status. If there is no provision for the duration or determination of a partnership, such a partnership is called a “partnership at will”.
The Partners are bound to carry on the business of the firm to the 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. Every partner is liable to indemnify the firm for any loss caused to it by his fraud in the conduct of the business of the firm.
Every partner has a right to take part in the conduct of the business and every partner is bound to attend diligently to his duties in the conduct of the business. Any differences arising as to ordinary matters connected with the business may be decided by a majority of the Partners. However, a change in the nature of business can be decided only with the consent of all the partners.