CA Success Path- Foundation: post #4089 — TG.ME

As per the provision of the Indian Partnership Act, 1932, the following are the mutual rights and duties of partners: - i) Right to remuneration: No partner is entitled to receive any remuneration in addition to his share in the profits of the firm for taking part in the business of the firm. But this rule can always be varied by an express agreement or by a course of dealings in which the partner will be entitled to remuneration. Where it is customary to pay remuneration to a partner for conducting the business of the firm, he can claim it even in the absence of a contract for the payment of the same. ii) Right to share Profits: Partners are entitled to share equally in the profits earned and so contribute equally to the losses sustained by the firm. There is no connection between the proportion in which the partners shall share the profits and the proportion in which they have contributed towards the capital of the firm. iii) Interest on Capital: The following elements must be there before a partner can be entitled to interest on money brought by him in the partnership business: a) An express agreement to that effect or practice of the particular partnership or b) Any trade custom to that effect; or  c) a statutory provision which entitles him to such interest. iv) Interest on advances: Suppose a partner makes an advance to the firm in addition to the amount of capital to be contributed by him; in such a case, the partner is entitled to claim interest thereon @ 6% per annum. While interest on capital account ceases to run on dissolution, the interest on advances keeps running even after dissolution and up to the date of payment. v) Right to be indemnified: Every partner has the right to be indemnified by the firm in respect of payments made and liabilities incurred by him in the ordinary and proper conduct of the business of the firm as well as in the performance of an act in an emergency for protecting the firm from any loss if the payments, liability and act are such as a prudent man would make, incur or perform in his own case, under similar circumstances. vi) Right to indemnify the Firm: A partner must indemnify the firm for any loss caused to it by willful neglect in the conduct of the business of the Firm