Lawfarm Team
in Corporate Law Contracts Law Civil Law Jurisprudence
Asked May 23, 2016

Business Partner is cheating me.

  • 1 Answer

I am one of two partner of a company. We decided to close the partnership with mutual division of 50 % area and assets. We both signed the documents for desolate bank current account, income tax, cable service providers etc. Now my partner has made another company with his own proprietary and captured whole business properties. He has not given any assets and area to me. I want a solution how to recover my 50% share. What do I do?

Answer 1

Answered by Anina D'Cunha, Lawfarm Researcher:   If you have contributed any assets to the business in the form of money or property, you will need to make sure that these are documented. A partner will be entitled to have the property of the firm applied in payment of liabilities of the firm and after this is done, to distribute the rest among the partners. (Section 46 of the Partnership Act, 1932) The method of settlement of accounts after the dissolution of a firm is determined by the partnership agreement. However, in the absence of such an agreement, Section 48 of the Indian Partnership Act, 1932 provides for settlement of accounts. According to Section 48 (b)(ii) the assets of the firm, including any sums contributed by the partners to make up deficiencies of capital, shall be applied in paying to each partner what is due to him. Furthermore, since your partner has breached your contract, you can file a suit in the civil court for compensation for loss or damage caused by breach of contract, underSection 73 in The Indian Contract Act, 1872, and the loss needs to be proved to the court by documents, accounts, etc.
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