VOLUNTARY WINDING UP UNDER THE SUPERVISION OF COURT

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According to section 396 of Companies Ordinance, a voluntary winding up of a company can also be carried under the strict registration of the court. 1.  Resolution At first, company has to pass special resolution for the voluntary winding up of the company. 2.  Supervision Order Following are the common grounds on which the court issues the supervision order: 1.  The liquidator performs his duty in partial manner. 2.  The winding up resolution is obtained by fraud. 3.  The liquidator does not strictly observe the rules of winding up the company 3.  Power of the Court The court has the power to appoint an additional liquidator, or to remove any liquidator. 4.  Dissolution After the supervision order is made, the liquidator may exercise his powers in winding up of a company.  On completion of winding up, the court will make an order that the company is dissolved. Share Capital; In simple words, the term “capital” means the particular amoun...
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PARTNERSHIP

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Partnership and its Characteristics

Partnership is the second stage in the evolution of forms of business organization.  It means
the association of two or more persons to carry on as co‐owners, i.e. a business for profit.
The  persons  who  constitute  this  organization  are  individually  termed  as  partners  and
collectively known as firm; and the name under which their business is conducted is called
“The Firm Name”.

In ordinary business the number of partners should not exceed 20, but in case of banking
business  it  must  nor  exceed  10.  This  type  of business  organization  is very  popular  in
Pakistan.

DEFINITION

1.  According to Section 4 of Partnership Act, 1932

“Partnership is the relation between persons who have agreed to share the profits of
a business carried on by all or any of them acting for all.”

2.  According to Mr. Kent

“A contract of two or more competent persons to place their money, efforts, labour
and skills, some or all of them, in a lawful commerce or business and to divide the
profits and bear the losses in certain proportion.”

CHARACTERISTICS 

The main characteristics of partnership may be narrated as under:

1.  Agreement

Agreement is necessary for partnership.  Partnership agreement may be written or oral.  It is
better that the agreement is in written form to settle the disputes.

2.  Audit

If partnership is not registered, it has no legal entity.  So there is no restriction for the audit
of accounts.

3.  Agent 

In partnership every partner acts as an agent of another partner.

4.  Business

Partnership is a business unit and a business is always for profit.  It must not include club or
charitable trusts, set up for welfare.

5.  Cooperation

In partnership mutual cooperation and mutual confidence is an important factor.
Partnership cannot take place with cooperation.

6.  Dissolution

Partnership is a temporary form of business.  It is dissolved if a partner leaves, dies or
declared bankrupt.

7.  Legal Entity

If partnership is not registered, it has no legal entity.  Moreover, partnership has no
separate legal entity from its members and vice versa.

8.  Management

In partnership all the partners can take part or participate in the activities of business
management.  Sometimes, only a few persons are allowed to manage the business affairs.

9.  Number of Partners 

In partnership there should be at least two partners.  But in ordinary business the partners
must not exceed 20 and in case of banking business it should not exceed 10.

10.  Object 

Only that business is considered as partnership, which is established to earn profit.

11.  Partnership Act

In Pakistan, all partnership businesses are running under Partnership Act, 1932.

12.  Payment of Tax

In partnership, every partner pays the tax on his share of profit, personally or individually.

13.  Profit and Loss Distribution

The distribution of profit and loss among the partners is done according to their agreement.

14.  Registration

Many problems are created in case of unregistered firm.  So, to avoid these problems
partnership firm must be registered.

15.  Relationship

Partnership business can be carried on by all partners or any of them can do the business
for all.

16.  Share in Capital

According to the agreement, every partner contributes his share of capital.  Some partners
provide only skills and ability to become a partner of business and earn profit.

17.  Transfer of Rights

In partnership no partner can transfer his shares or rights to another person, without the
consent of all partners.

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