Rights in a Partnership

As per Section 4 of The Indian Partnership Act, 1932, partnership is defined as “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.” A mutual relation is created between the partners of a business firm is by an
agreement.

The following are the rights of a partner in a partnership firm as per The Indian Partnership Act,
1932.

Section 12(a): Right to take part in Business

Every partner of a partnership has a right to be involved in the business proceeding.

Section 12(c): Right to be consulted

In case of matters affecting the business, each partner can have the right to be consulted.

Section 12(d): Right to access books

Every partner of the firm is entitled to have access to any of the books, and can inspect and make
a copy of those.

Section 13(a): Right to remuneration

No partner is entitled to any remuneration. But by an express agreement or by a course of

dealings the partner will be entitled to remuneration.

Section 13(b): Right to share profits

Each partner has a right of equal share in the profits arising of the firm. The partners are also
equally liable to all the losses of the firm.

Section 13(c): Right to Interest on capital

Ordinarily, no interest is payable to the partners. If it is allowed by an agreement or by the

custom of trade, a partner can charge interest on capital.

Section 13(d): Interest on advances

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A partner who contributes additional advance to the firm apart from the amount of his capital is
entitled to get an interest on that at the rate of 6% per annum.

Section 13(e): Right to be indemnified

The partner of a firm is entitled be indemnified by the firm when

a) Expenses incurred in the ordinary course of business

b) Expenses incurred in an emergency.

Section 21: Partner's authority in an emergency

A partner is vested with the powers to initiate action to safeguard the firm from loss in case of an
emergency.

Section 31: Right to stop the introduction of a new partner

Every partner has the right to stop the admission of a new partner in the firm without the consent
of the other existing partners.

Section 32(1): Right to retire

Every partner has the right to retire or withdraw himself from the partnership. He will need the
consent of other partners for this.

Section 33: Right not to be expelled

Every partner is entitled the right to continue the business. A partner cannot be dismissed from
the firm by any majority of the partners ordinarily.

Section 36(1): Right of outgoing partner

A partner outgoing from the partnership firm may carry on a competing business. The partner
cannot use the firm’s name.

Section 37: Right of outgoing partner on subsequent profits

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If partner dies or ceases to be a partner, the surviving or continuing partners may carry on the
regular business with the firm’s property. The outgoing partner or his estate will be entitled to:

a) his share of the profits proportionate to his share in the property, or

b) Interest at the rate of 6% per annum on the amount of his share in the property.

Section 40: Right to dissolve the firm

A partner has the right to dissolve the partnership anytime with the consent of all the other
partners.

A partnership depends on cooperation and mutual trust. So it is responsibility of every partner to

work efficiently towards the benefits of the firm.