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