Section 14: The property of the firm

Key takeaways

What becomes firm property

Subject to contract between the partners, section 14 covers property, and rights and interests in property, that are:

• originally brought into the stock of the firm;
• acquired, by purchase or otherwise, by or for the firm;
• acquired for the purposes and in the course of the business of the firm; and
• the goodwill of the business.

The firm-money presumption

Unless the contrary intention appears, property acquired with money belonging to the firm is deemed to have been acquired for the firm. Clear records of who paid for an asset, and why, help show whether the presumption applies or has been displaced.

Related provisions

Section 15 requires firm property to be held and used exclusively for the business, subject to contract. On dissolution, section 46 entitles every partner to have the firm's property applied in paying its debts and liabilities and the surplus distributed according to the partners' rights, and section 48 sets the order for settling accounts.

• India Code: Indian Partnership Act, 1932, section 14

Hypothetical business example

Hypothetical: One partner lets the firm use premises he owns without transferring them, while a delivery van is bought from the firm's bank account. Unless the partnership deed says otherwise, the van is deemed firm property. Whether the premises were brought into the stock of the firm depends on what the partners agreed.

Check the applicable state law

The India Code consolidated central text (as on 7 July 2025) records no State amendment to section 14, although several States have amended other sections of the Act, mainly those on registration of firms. Confirm the law of the State where the firm carries on business, and the firm's own partnership agreement, before acting.

Practical checklist

Glossary

Stock of the firm

The common fund of assets the partners contribute to the business.

Goodwill

The value of the business's reputation and connections, which section 14 includes in firm property.

Frequently asked questions