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Partnership for an adventure

Section 8 of the Partnership Act provides that a person may become a partner with another partner In particular adventure or undertaking.

As observed by the Gujarat High Court, the common law does not recognise the relationship of co-adventurers but with the passage of time, the judicial decisions have recognised what is known, as joint ventures of two or more persons undertaking to combine their property or labour in context of a particular line of trade or general business for joint profits. The courts do not treat a joint adventure as identical with the partnership though it is so similar in nature, and in the contractual relations created between such adventurers the rights as between them are governed particularly by the same rules that govern the partnership.

This relationship has been defined to be a special combination of persons undertaking jointly some specific adventure for profit without any actual partnership.

It is also described as a commercial or maritime enterprise undertaken by several persons jointly, a limited partnership, not limited in the statutory sense as to the liabilities of the partners, but as to its scope or duration. Generally speaking the distinction between joint venture and partnership is that former relates to a single transaction though It may comprehend business to be continued over several years while the latter relates to a joint business of a particular trade. In order to constitute a joint venture there must be a community of interest and right tojoint control.

It is recognised on authority that each of the partners must have equal voice in the matter of performance and control over the activities used therein though one authority may entrust the performance to another. 

The rights and duties and liabilities of a joint venture are similar or analogous to those which govern corresponding rights and duties and liabilities of the partners. The only difference between partnership under section 8 of the Partnership Act and an ordinary partnership is that in joint venture, parties undertake no liability beyond the limit of a particular venture/adventure or business or undertaking and their rights and obligations are, therefore, less extensive than those of the partners in ordinary partnership.

Partnership an agency

The third essential of a partnership is that a partnership business actually may be carried on by all the partners together or by any one or more partners for all and on behalf of the others, in which case each partner is an implied agent of the other partners. It is not. therefore, necessary that all the partners take part in the business of the partnership firm. Some partners can be active partners and others can be sleeping partners. But it must be clear that there is an implied or express agency constituted in favour of one partner by the other partners. If there is no element of agency, even if there is any agreement to share profits, there will be no partnership. So a partner has a double capacity, he is the principal so far as he is concerned and the agent so far as other partners are concerned.

Period of partnership

A partnership can be for a fixed period of time or it may be limited to a particular adventure as provided in  Section 8  or it may be for a duration at the will of the partners. Where the period of the partnership is not fixed and the partnership is not for a particular adventure then under  section 7 of the Act the partnership shall be deemed to be a partnership at will.

 


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