Rights of a Partner:
Subject to a contract between partners, the following are the main rights of a partner of a partnership enterprise.
1. Right to take part in management:
Every partner has the right to take part in the management and conduct of day to day affairs of the business of the partnership enterprise.
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2. Right to express opinion:
Every partner has right to express his opinion on the matters relating to business of the partnership enterprise. Ordinary matters during the course of business are decided by majority votes, but major business decision of the business are taken unanimously by all the partners.
3. Right to take out copies and inspect the books of account:
ADVERTISEMENTS:
Every partner has a right to inspect the books of accounts of the partnership enterprise and further take out the copies of the same.
4. Right to share profits:
In the absence of any contract to the contrary, every partner has an equal share in the profits of the partnership enterprise. Otherwise, they have to share the profit and loss as per the agreed ratio stated in the partnership deed.
5. Right to have interest on capital:
In the absence of any agreement, express or implied, a partner is not entitled to get any interest on capital contributed by him.
It may be further pointed out here that a partner is entitled to interest (subject to the agreement to the contrary) only out of profits earned by a firm. If a firm incurs losses, on interest on capital can be claimed by a partner.
6. Right to have interest on advances:
ADVERTISEMENTS:
Every partner in the partnership enterprise is entitled to get interest on any advances made by him over and above his capital @ 6% per annum.
A partner is not entitled to receive interest on advances made by him after the dissolution of the partnership enterprise, unless there is an express or implied agreement to that effect.
7. Right to be indemnified.
Every partner has the right to be indemnified by the firm in respect of any losses suffered and expenses incurred by him in the conduct of the business of the firm.
8. Right to have joint share in the partnership property:
The property of the firm belongs to all the partners and can be used for the common benefit of all the partners. Partnership property may be used by a partner for his personal benefit only subject to express contract between the partners.
9. Right in emergency:
ADVERTISEMENTS:
A partner has the right to protect the firm loss in any emergency by undertaking any act as would be deemed fit and have done by a person of ordinary produce in his own case under similar circumstances. Such acts of the partner shall be binding on the firm.
10. Right of preventing the entry of new partner:
Every partner has the right to prevent the induction of a new partner in the firm with out the consent of all the partners. It may be pointed out here that the partnership deed or Agreement may contain a provision allowing one of the partners to introduce a new partner.
11. Right to having no liability before joining the partnership firm:
A partner is not liable for any of the liabilities of the firm before he has joined the firm. Simply stated, a new partner joining the firm can’t be held responsible for the earlier acts of the old partners.
12. Right to retirement:
Every partner has the righty to retire from the firm with the consent of all other partners or in accordance with an express agreement among the partners, or by giving a notice in writing to all other partners.
13. Right to dissolve:
Every partner has the right to dissolve the partnership firm with the consent of all other partners except when the partnership is at will. In that case dissolution of firm takes place after giving notice by any partner in writing to all other partners.
14. Right to have profits after retirement or death:
After retirement every partner and his legal heirs (in case of his death) had the right to share the profits or to have 6% interest as per choice unless the balance due to the partner is paid off.
15. Right to carry on competitive business:
A retiring partner has a right to carry on compatible business i.e. a business similar to the firm’s business, but in the absence of contract to the contrary he can’t use the firm’s name in which he was originally a partner and represent himself as carrying on the business of the partnership enterprise.