Indian Partnership Act, 1932
An Act to define and amend the Law Relating to Partnership.
TaxByKK · Laws by Sector · taxbykk.comIndex as on 7th July, 2025
Index of provisions · 8 chapters, 74 sections
Chapter I Preliminary3 sections
Chapter II The Nature of Partnership5 sections
Chapter III Relations of Partners to One Another9 sections
- 9General duties of partners
- 10Duty to indemnify for loss caused by fraud
- 11Determination of rights and duties of partners by contract between the partners. Agreements in restraint of trade
- 12The conduct of the busin ess
- 13Mutual rights and liabilities
- 14The property of the firm
- 15Application of the property of the firm
- 16Personal profits earned by partners
- 17Rights and duties of partners — after a change in the firm, after the expiry of the term of the firm, and where additional undertakings are carried out
Chapter IV Relations of Partners to Third Parties13 sections
- 18Partner to be agent of the firm
- 19Implied authority of partner as agent of the firm
- 20Extension and restriction of partner’s implied authority
- 21Partner’s authority in an emergency
- 22Mode of doing act to bind firm
- 23Effect of admissions by a partner.,
- 24Effect of notice to acting partner
- 25Liability of a partner for acts of the firm
- 26Liability of the firm for wrongful acts of a partner
- 27Liability of firm for misapplication by partners
- 28Holding out
- 29Rights of transferee of a partner’s interest
- 30Minors admitted to the benefits of partnership
Chapter V Incoming and Outgoing Partners8 sections
- 31Introduction of a partner
- 32Retirement of a partner
- 33Expulsion of a partner
- 34Insolvency of a partner
- 35Liability of estate of deceased partner
- 36Rights of outgoing partner to carry on competing business. Agreements in restraint of trade
- 37Right of outgoing partner in certain cases to share subsequent profits
- 38Revocation of continuing guarantee by change in firm
Chapter VI Dissolution of a Firm17 sections
- 39Dissolution of a firm
- 40Dissolution by agreement
- 41Compulsory dissolution
- 42Dissolution on the happening of certain contingencies
- 43Dissolution by notice of partnership at will
- 44Dissolution by the Court
- 45Liability for acts of partners done after dissolution
- 46Right of partners to have business wound up after dissolution
- 47Continuing authority of partners for purposes of winding up
- 48Mode of settlement of accounts between partners
- 49Payment of firm debts and of separate debts
- 50Personal profits earned after dissolution
- 51Return of premium on premature dissolution
- 52Rights where partnership contract is rescinded for fraud or misrepresentation
- 53Right to restrai n from use of firm name or firm property
- 54Agreements in restraint of trade
- 55Sale of goodwill after dissolution. Rights of buyer and seller of goodwill. Agreements in restraint of trade
Chapter VII Registration of Firms16 sections
- 56Power to exempt from application of this Chapter
- 57Appointment of Registrars
- 58Application for registration
- 59Registration
- 60Recording of alterations in firm name and principal place of business
- 61Noting of closing and opening of branches
- 62Noting of changes in names and addresses of partners
- 63Recording of changes in and dissolution of a firm. Recording of withdrawal of a minor
- 64Rectification of mistakes
- 65Amendment of Register by order of Court
- 66Inspection of Register and filed documents
- 67Grant of copies
- 68Rules of evidence
- 69Effect of non -registration
- 70Penalty for furnishing false particulars
- 71Power to make rules
Chapter VIII Supplemental3 sections
Schedules
- Schedule I. —maximum Fees The Indian Partnership Act, 1932 Act No. 9 of 1932
About this Act
The Indian Partnership Act, 1932 (Act 9 of 1932) defines and governs partnership firms in India. It covers how a partnership comes into being, the mutual rights of partners, their liability to outsiders, changes in the firm and its dissolution.
The Act does not create a regulator. Registration of firms is handled by Registrars appointed by State Governments under Chapter VII, and matters not covered by the Act fall back on the Indian Contract Act, 1872.
Its 74 sections sit in eight chapters. Registration is not compulsory, but section 69 restricts the right of an unregistered firm and its partners to sue, which makes registration important in practice.
Who it applies to
- Partnership firms and their partners
- Persons proposing to form a firm or to join, retire from or be expelled from one
- Third parties, including lenders and customers, dealing with a firm
- Minors admitted to the benefits of partnership
- Registrars of Firms and courts dealing with partnership disputes and dissolution
Good to know
- Key chapters
- Chapter IV (relations of partners to third parties, sections 18 to 30), Chapter VI (dissolution, sections 39 to 55) and Chapter VII (registration of firms, sections 56 to 71).
- Amended by
- The Repealing and Amending Act, 1934 (24 of 1934) and the Part B States (Laws) Act, 1951 (3 of 1951).
Frequently asked questions
Which section of the Partnership Act defines partnership, partner and firm?
Section 4.
Which section deals with a partner's implied authority to bind the firm?
Section 19, with extension and restriction of that authority in section 20.
Which section covers minors admitted to the benefits of partnership?
Section 30.
Which section allows dissolution of a firm by the court?
Section 44.
What is the effect of not registering a firm?
Section 69 sets out the effect of non-registration.