The rights and obligations of partners are generally laid down in the partnership deed. In case the partnership deed does not specify them, then the partners will have rights and obligations prescribed in the Partnership Act. These are given below:
Rights of Partners
1. Every partner has a right to take part in the conduct and management of the firm's business.
2. Every partner has a right to be consulted and express his opinion on any matter related to the firm. In case of difference of opinion, the decision has ordinarily to be taken by a majority.
But vital issues like admission of a new partner, change in the firm's business, alteration of profit-sharing ratio, etc., must be resolved by unanimous consent of all the partners.
3. Every partner has a right to have access to inspect and copy any books of accounts and records of the firm.
4. Every partner has the right to an equal share in the profits of the firm, unless otherwise agreed by the partners.
5. Every partner has the right to receive interest on loans and advances made by him to the firm. The rate of interest should be 6 per cent unless otherwise agreed by the partners.
6. Every partner has the right to be indemnified for the expenses incurred and losses sustained by him in the ordinary conduct of the firm's business.
7. Every partner has a right to continue in the firm unless expelled in accordance with the terms of the partnership agreement.
8. Every partner has a right to retire in accordance with the terms of the partnership agreement or with the consent of other partners.
Duties and Liabilities of Partners
1. Every partner must act diligently and honestly in the discharge of his duties to the maximum advantage of all the partners.
2. Every partner must act in a just and faithful manner towards each other.
3. Every partner must act within the scope of the authority entrusted to him.
4. Every partner is bound to share the losses of the firm equally unless otherwise agreed.
5. Every partner must indemnify the firm against losses sustained due to his willful negligence in the ordinary course of business.
6. No partner can transfer or assign his interest in the firm to others without the consent of others partners.
7. Every partner must maintain and render true and correct accounts relating to the firm's business.
8. No partner must engage himself in a business in competition with the firm; otherwise he will be liable for any loss suffered by the firm. He will have to surrender private profits to the firm.
9. Every partner should use the firm's property only for the firm's business and interest.
10. No partner should make secret profits by way of commission or otherwise from the firm's business. He is liable to account for and pay to the firm any private profit from the transactions of the firm or from the use of its property or goodwill.
11. Every partner is liable jointly with all the other partners and also severally for all the debts of the firm. The liability of a partner to third parties is unlimited.