Monday, October 08, 2007

Parternship Act_Practical Problems_4

A and B purchased a taxi to ply in partnership. They plied the taxi for a year when A, without the consent of B, disposed of the taxi. B brought an action to recover his share in the sale proceeds. A resisted B's claim on the ground that the firm was not registered. Will B succeed in his claim?

Yes- B will succeed in his claim. Although under Section 69 of the Partnership Act, a partner of an unregistered firm cannot enforce any of his contractual or legal rights against any other partner but non registration of a firm does not affect a partner's right to seek settlement of accounts of a dissolved firm. In this given case, the taxi having been sold, the business of the firm has already been dissolved. B shall thus, be entitled to claim his share in the sale proceeds.

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