(b) His share shall not be liable for any acts of the firm done after the date

of the notice.

Q. Define Particular Partnership.

When a partnership is formed for the object of conducting a particular business, it is called particular
partnership. (Sec. 17) The particular undertaking cannot be extended to any other enterprise and this
would last only so long as the business id not completed. But if the partnership firm goes to carry on
other business then in the absence of an agreement to the contrary, the rights and duties of the
member in the new undertaking will continue to be the same as in the earliest enterprises.

Q. Mention any six acts not falling within the implied authority of partner. Discuss the legal provisions
relating to expulsion of a partner

Implied authority of a partner

A partner's authority may be express or implied. An authority is said to be express when it is given by
words, spoken or written. It is implied where there is no express agreement between the partners, in
which case, the law impliedly gives certain powers to a partner and also negatives certain other powers
as regards partners. The word "implied" suggests that authority of a partner which is apparent from his
position in a partnership firm in relation to the business of the firm. Section 19 deals with the subject of
implied authority of a partner. It is reproduced below:—

"19. implied authority of a partner as agent of the firm.—(1) subject to the provisions of section 22, the
act of a partner which is done to carry on, in the usual way, business of the kind carried on by the firm,
binds the-firm.

Thus a partner, in the case of a trading firm, in the exercise of his implied authority, can bind the firm by
any of the following acts:

(1) He may draw, make, sign, endorse, accept, transfer, negotiate and procure to de discounted,
promissory notes, bills of exchange, cheques and other negotiable paper in the name and on account of
the partnership firm. A partner of a non-trading firm does not ordinarily possess the power to bind his
copartners by drawing or accepting bills of exchange. Therefore, a partner of a non-trading firm cannot
in the exercise of implied authority bind his copartners by giving a post-dated cheque.

(2) He may borrow money for the purposes of the business of the firm,

(3) He may pledge or sell moveable property of the firm,

(4) He may buy goods on account of the firm which are necessary for or usually required for the
purposes of the business of the firm,

(5) He may receive payment of debts on account of the firm and give valid discharge by issuing a receipt
for the same,

(6) He may pay debts on account of the partnership firm,

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(7) He may employ servants for the partnership.

(8) He may sue on behalf of the firm and for this purpose may engage a lawyer. Similarly he can defend a
suit brought against the firm and may engage a lawyer for this purpose.

In an ordinary partnership, a partner may bind the firm by any of the acts mentioned in (4) to (7) above.

All the partners of a firm can ratify an act of a partner, which has been done in excess of his implied
authority or without any authority, provided the act is such that it can be legally done by the authority
of all the partners previously given.

Statutory restrictions on implied authority

Sub-section (2) of section 19 provides certain acts which do not, in the absence of any usage or custom
of trade to the contrary, fall within the implied authority of a partner. Thus a partner is not authorised
to do these acts without consulting the other partners. The sub-section says that "in the absence of any
usage or custom of trade to the contrary, the implied authority of a partner does not empower him to—

(a) Submit a dispute relating to the business of the firm to arbitration,

(b) Open a banking account on behalf of the firm in his own name,

(c) Compromise or relinquish any claim or portion of claim by the firm.

(d) Withdraw a suit or proceeding filed on behalf of the firm.

(e) Admit any liability in a suit or proceeding against the firm,

(f) Acquire immovable property on behalf of the firm.

Grounds for Expulsion of partners

Ideally the grounds for expelling a partner from the partnership will be set forth in detail in the
partnership agreement. The agreement may provide that a partner may be expelled upon vote of the
other partners for any reason or no reason. Or, it may specify certain reasons for expulsion, such as:

• breaching the partnership agreement or otherwise failing to carry out the partner’s obligations
under the agreement

• being charged with, or convicted of, a crime

• professional misconduct, or

• Filing for bankruptcy.

The agreement should also specify how the decision to expel is to be made—for example, whether a
majority vote is sufficient or a unanimous vote (not counting the partner to be expelled) will be
required. Unfortunately, not all partnership agreements address expulsion; and some partners don't
even have a written agreement. In some states, if partners don't have a written agreement that provides
for expulsion, the only way to expel a partner is to dissolve the partnership and start a new partnership.
The partners may expel a fellow partner by unanimous vote if:

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 • the partner transfers substantially all of his or her partnership interest (other than as security for
a loan)

• it is unlawful to carry on the business with that partner

• a corporate partner ceases being a corporation in good standing

• a partnership that is a partner has been dissolved and its business is being wound up, or

• The partner’s interest in the partnership becomes subject to a charging order.

In addition, in most states, the partnership itself, or any individual partner, may go to court and obtain a
court order expelling a partner if:

• the partner engaged in wrongful conduct that adversely and materially affected the partnership
business

• the partner materially and willfully breached the partnership agreement, or

• The partner’s conduct makes it not reasonably practicable to carry on the partnership business
with that partner.

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