CIVIL

A partnership firm is not a legal entity like a Company

i) Section 4 of the Indian Partnership Act, 1932 provides under Chapter II and defines partnership as the relation between persons who have agreed to share the profits of a business carried on by all or any one of them. Individually they are called partners and collectively a firm and the name under which their business is carried on is called the firm name.

ii) The Supreme Court in the case of Comptroller & Auditor-General v. Kamlesh Vadilal Mehta 2003 (2) SCC 349 held that partnership firm is not a legal entity like a Company. It is mere collective name of group of individual partners.

iii) Supreme Court in the case of N.Khadervali Saheb v. N.Gudu Sahib 2003(3) SCC 229 held that firm name is only a compendious name given to the partnership and partners are the real owners of the assets and Partnership Firm is not a legal entity.

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