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OVERVIEW : PARTNERSHIP ACT 1932 ---- DISPUTES & REMEDIES

Hello friends, today we shall look into some of the key aspects involved in day to day affairs connected to partnership. The rules governing the same are laid down in THE PARTNERSHIP ACT 1932. Some of the important sections of the said act are as follows:-

Section 4 talks about the basic meaning of the term partnership stating its being a relation between the parties who has come together for a business. In other words, it is created by a contract and not by a mere status.

Section 6 deals with the issue as to determine the status of a business as to being a partnership or not.

Section 7 says that any partnership shall be governed as per will of the persons entering into the same.

NOW WE SHALL TALK ABOUT THE DISPUTES ARISING THEREFROM AND THEIR REMEDIES

DISPUTES 

1. Where one set of partners wants dissolution and remaining wants to continue with the partneship concern there may arise a situation of a possible dispute.

2. The dispute might arise in case of a particular contingency. Say for example, the property involved in the partnership might be appropriated by any individual partner for his own personal use without having the consent of the other partners.

3. In case one of the partner claims that the partnership at will is being dissolved because he has already sent a notice but if the date happens to be missing in the said notice, then it might become a case of dispute.

4. Cases when there are talks of settlement being in progress among the partners, in such an event also there might arise a chance for a dispute.

REMEDIES

a. In order for speedy solution among the disputes which arose under a partnership concern, the disputes valuing more than a sum of rs. 3 Lacs, shall be adjudicated by the commercial courts and not the ordinary civil court as per the Commercial Courts Act, 2015.

b. In cases where an agreement forming the partnership contains an arbitration clause, in such cases before moving to the court, the parties are adhered to comply with the same. It even deals with the cases involving an element of fraud.

c. Another plausible remedy is to seek the dissolution of the firm which may be granted by filing a petition before the commercial court. In such cases, before granting dissolution, the petitioner may also file a petition for the appointment of the receiver. Moreover, the liabilities of the partners shall continue even after dissolution.

 This was just an attempt to make you all aware of the possible disputes and likely remedies which might arise in a partnership. If you have any queries feel free to comment below.

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