artnership Business a form of business organization created through voluntary agreements of minimum two and maximum 20 persons (the maximum is 10 in the case of banking business), with the intention of making and sharing profits among themselves. A partnership can arise only as a result of an agreement or contract, expressed or implied, between the partners. In Bangladesh, a partnership firm is to be formed under the provisions of the Partnership Act 1932. A person of unsound mind is not eligible to become a partner. A minor is also not eligible to become of partner in a firm. However, if all the partners agree, a minor may only be admitted to the benefits of an already existing partnership. By definition, a partnership is illegal if it consists of more than 20 persons in case of a general business and more than 10 persons in case of business in banking. A non-profit making association is not a partnership in law of Bangladesh. In general, institutions or associations cannot be a member of a partnership. The Partnership Act 1932 does not require a partnership deed or agreement to be registered. The registration of such firm is optional. But if registered, a partnership firm can enjoy some legal rights and facilities. A partnership deed includes- * the name of the firm,
* nature of business,
* the capital and property of the firm,
* the capital of individual partners,
* term of partnership,
* provision for salaries, and
* rate of interest (if any) on partners' capital,
* advances and drawings,
* rights and duties of individual partners,
* provision for accounts and audit,
* division of profits and losses (capital and revenue),
* powers of admission and removal of a partner,
* termination of agreement by insolvency, death, etc.,
* Valuation of goodwill and share of assets on sale or death. The partnership business plays a dominant role in the trade sector in Bangladesh. As on 30 June 2000, the total number of partnership firms registered in Bangladesh under the Partnership Act 1932 were 32,726. No statistics are available on the general partnership firms (non-registered). A large number of partnership firms both general and registered became ineffective or liquidated due to non-compliance of conditions of contract, appropriation of funds, distrust, and other malpractice by the partners.
THE PARTNERSHIP ACT, 1932
(ACT NO. IX OF 1932)
SHORT TITLE EXTENT AND COMMENCEMENT
(1) This Act may be called the Partnership Act, 1932.
(2) It extends to the whole of Bangladesh
(3) It shall come into force on the 1st day of October, 1932, except section 69 which shall come into force on the 1st day of October, 1933. Section2
In the Act, unless there is anything repugnant in the subject or context, (a) An "act of a firm" means any act or omission by all the partners, or by any partner or agent of the firm which gives rise to a right enforceable by or against the firm; (b) "Business" includes every trade, occupation and profession; (c) "Prescribed" means prescribed by rules made under this Act; (C-1) "Registrar" means the Registrar of Firms appointed under sub-section (1) of section 57 and includes the Deputy Registrar of Firms and Assistant Registrar of Firms appointed under sub-section (2) of that section; (d) "Third party" used in relation to a firm or to a partner therein means any person who is not a partner in the firm; and (e) Expressions used but not defined in this Act and defined in the Indian Contract Act, 1872, shall have the meanings assigned to them in that Act.
DEFINITION OF "PARTNERSHIP", "PARTNER", "FIRM" AND "FIRM-NAME"
"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. Persons who have entered into partnership with one...
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