Implied authority Q. What are implied authorities of a partner? What matters have been excluded specically from such authorities by the act. 1. Introduction: Under partnership act act 1932 every partner has right right to takes part part in management of business of the rm. Business is carried on by all the partners or any of them acting for all the partners. The partner have to eercise their authorities in order to conduct the business. The authority of a partner to act be epress epress or implied.
2. Implied authority: !here there is no epress agreement" the act of a partner #hich is done to carry on in the usual #ay" business of the kind carried on by the rm binds the rm. $t is implied authority. authority.
3. orm of authority %uthority may be&
$. %onditions of implied authority: 'onditions of implied authority are as under.
!a"%onditions on behalf of rm: %ct done by a partner is on behalf of a rm.
!b"&ct done as partner: %ct done on behalf of rm is done by person as a partner of rm.
!c" 'se the name of rm: The act is done done in the name of of the rm.
!d"(usiness ob)ects: %ct done is for business ob(ects a rm.
!e"*o carry on business: The act done relates relates to the normal normal business business of the rm. rm.
+. Implied authority of a partner:
% partner can do the follo#ing acts under implied authority.
% partner can borro# money on the credit of the rm
%ase la, 1/0 %% 2+$1 $t #as held that one partner can borro# on credit on the rm if the rm is trading rms" and no duty is cast upon the person advancing money to make any further en)uiry.
urchasin- of -oods:
*e can purchase goods for the rm on credit if it is necessary to carry on the business.
%ase la, 1/ %% 1/$ $t #as held that a partner had no implied authority to bind his rm by opening a bank account in his o#n name.
*e can make contract on behalf of rm.
%ase la, . . 4 1 ah. $+2 $t #as held that #here a partner enter into contract on behalf of the rm and his partner do not ob(ect to the contract" the opposite party can not say that the contract #as entered into by the partner of the rm.
*o sale property of rm:
*e can sale the goods of the rm" +moveable,
6rantin- the receipt:
*e can issue receipt on behalf of a rm.
*e can pledge property of rm for loan.
!5II" *o receive money:
*e can receive payment on behalf of rm.
!5III" e-al services: *e can engage solicitor to defend an action against the rm.
8ettlement of accounts:
*e can settle accounts #ith the persons dealing #ith the rm. -. &cts outside implied authority: % partner can not do the follo#ing acts.
8ubmit a dispute to arbitration:
*e cannot submit a dispute relating to the business of the rm for arbitration.
*e can not open a bank account on behalf of the rm in his o#n name.
*e can not compromise any claim or portion of any claim by the rm.
Withdra,al of suit:
*e can not #ithdra# any suit led by the rm.
&dmit any liability:
*e cannot admit any liability in a suit against the rm.
&cuire immoveable property:
*e cannot ac)uire any immovable property on behalf of rm.
!5II" *ransfer of immoveable property: *e can not transfer immovable property belonging to rm.
!5III" &-reement: *e cannot enter in to agreement of partnership on behalf of rm.
0. %onclusion: *o conclusion it can be said that; implied authority is an authority of partner ,hich binds the rm by his act under la,. *he scope of implied authority is lin9ed ,ith the nature of business of the rm. & partner