Sections 9 & 10 of the Indian Partnership Act of 1932, lays down the basic duties which every partner has to and the said duties are not subject to any contract to the contrary. Therefore, the partners are bound to carry on the business of the firm to the greatest common advantage, in order to be just and faithful to each other and in order to render accounts and full information of all the things which either affect the firm or to any partner or his legal representative and every partner is bound to indemnify the firm for any of the loss that is caused to it by fraud in the conduct of the business of the firm.
Subject to this the mutual rights and the duties of the partners may be decided by a contract between the partners, which is either express or implied.
However Subject to any contract to the contrary such duties and rights of each partner are provided in sections 12 and 13 of the Indian Partnership Act, 1932.
- every partner is required to take part in the conduct of the business,
- every partner is required to attend diligently to his duties in the conduct of the business.
- any difference arising as to the ordinary matters that are connected with the business and may be decided by a majority of the partners and the nature of the business shall not be changed without having the consent of all the partners,
- every partner has a right to have access to and also to inspect and copy any books of the firm
- No partner is entitled to receive any remunerations as such for taking part in the conduct of the business,
- the partners are also entitled to share equally in the profits earned and they shall contribute equally to the losses that are sustained by the firm,
- where the partner is entitled to interest on the capital that is subscribed by him, interest, if any, shall be payable out of the profits only, for the purpose of the conducting of business, moreover any advance which is above the amount of the capital the partner has agreed to subscribe shall be entitled to an interest thereon at the rate of 6% per annum.
- the firm shall however also indemnify a partner in respect of payments that are made and the liabilities that are incurred by him,
- in the ordinary and the proper course of the conduct of the business and
- in doing such act in an emergency, for the purpose of protecting the firm from any loss, as it would be done by a person of an ordinary prudence, under similar circumstances, and
- the partner shall also indemnify the firm from any loss that is caused due to his willful neglect in the conduct of the business of the firm.
These rights and the duties will be implied in the partnership unless the partnership agreement provides to the contrary i.e. it makes any variation in the said rights and duties.
Similarly, subject to a contract to the contrary, if a partner derives any of the profit for himself from any transaction of the firm or from the use of the property or the business connection with the firm or the firm name that he is liable to account for the profit and pay it to the firm, and if the partner carries a business of the same nature as and which is competing with that of the firm, then he shall account for and he shall also pay to the firm all the profits that are made by him in that business.
POWERS OF THE COMPANY BOARD
The board of directors of a listed company is required to exercise its powers and also carry out its fiduciary duties with a sense of the objective judgment and independence in the best interests of the listed company.
However, they are required to ensure that:
(a) The professional standards and the corporate values are put in place that promotes an integrity for the board, senior management and other employees in the form of a Code of Conduct, that therein defines certain acceptable and unacceptable behaviors. The board shall take appropriate steps in order to disseminate the Code of Conduct throughout the company along with the supporting policies and the procedures and these shall be put on the company’s website;
(b) the adequate systems and the controls are in place for an identification and the redress of the grievances that arise from the unethical practices.
(c) a vision and/or a mission statement and the overall corporate strategy for the listed company is required to be prepared and it must be adopted. It shall further ensure that the significant policies have been formulated
(d) a system of a sound internal control is established, which is effectively implemented and is maintained at all the levels within the company;
(e) within two years of coming into force of this Code, a mechanism is put in place for an annual evaluation of the performance of the own board
(f) the decisions on the following material transactions or the significant matters are documented by a resolution that is passed at a meeting of the board:
- investment and disinvestment of the funds where the maturity period of such investments is six months or more, except in the case of banking companies, non-banking finance companies, and the insurance companies;
• determination of the nature of the loans and the advances made by the listed company and fixing of a monetary limit thereof.
(g) the board of directors shall prescribe the basic level of materialist in keeping an overview of the circumstances of the company and any other recommendations of any subcommittee that may be set up.
The legal responsibilities of the boards and the board members vary with the nature of the organization, and with the jurisdiction within which it operates. For the companies with publicly trading stock, these responsibilities are however typically much more rigorous and complex than for those of other types.
For more information, you can contact legalraasta.