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Partnership

17 August 2020

a b c are partners in a firm and d(a's wife) started a competing business. is a liable to account for the profit of his wife???

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4 Replies

divya gupta (trainee) (30 Points)
Replied 17 August 2020

If A's wife started a different business then why would her profit will be accountable in partnership account

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bsai partish (166 Points)
Replied 17 August 2020

If she starts same competing business is she liable???

Arpit Shah (Accountant) (21438 Points)
Replied 18 August 2020

As per deed if she is partner in firm then she is liable

Sagar Patel (Tax and Business Consultant) (11611 Points)
Replied 18 August 2020

D(a 's wife) can do a competing business as per law, because there is no restriction regarding same in Partnership Act, 1932.
Partnership Act provides only for Partners can not engage himself in business which is completing to business of Partnership firm, but it's also as per Partnership agreement.

So, D can be do business, if it's not specifically restricted in partnership deed.
but, usually it's not happen because partnership is based on mutual understanding and cooperation between Partners. Partner are not Suppose to do the things which can affect the firm's business adversely.