Chapter III - Relations of Partners to One Another
Section 15
Section 15: Application of the property of the firm
Section 15 requires partners to hold and use the firm's property only for the purposes of the business, unless they have agreed otherwise.
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Need advice on Section 15?
This article is for general information. Refer to the Indian Partnership Act, 1932 official text for the official provisions. If you need professional advice for your situation, contact Bizeneed.
Statutory text
Bare law
Subject to contract between the partners, the property of the firm shall be held and used by the partners exclusively for the purposes of the business.
Key takeaways
Exclusive business use
Firm property must be held and used by the partners exclusively for the purposes of the business.
Partners may agree otherwise
The rule applies subject to contract between the partners, so the deed can permit other uses.
What the rule requires
Once an asset is firm property under section 14, section 15 limits its use to the purposes of the business. A partner holds firm property for the firm, not for personal benefit, unless the partners have agreed to some other use.
Related duties
Section 16(a) provides, subject to contract, that a partner who derives any profit for himself from the use of the property of the firm must account for that profit and pay it to the firm. Section 9 requires partners to be just and faithful to each other and to render true accounts.
Hypothetical business example
Hypothetical: A partner uses the firm's machinery at weekends for a private job. Unless the partners agreed to allow this, the use breaches section 15, and any profit he makes from it must be accounted for and paid to the firm under section 16(a).
Check the applicable state law
The India Code consolidated central text (as on 7 July 2025) records no State amendment to section 15, 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
Do
- Record in the deed any agreed personal use of firm assets.
- Keep an asset register showing where firm assets are and who uses them.
Avoid
- Do not use firm assets for private work without the partners' agreement.
- Do not keep profits earned from the use of firm property.
Glossary
- Firm property
- The property of the firm described in section 14.
- Purposes of the business
- Uses connected with carrying on the firm's business.
Frequently asked questions
Can a partner use firm property personally?
Only if the partners have agreed. Otherwise section 15 requires firm property to be used exclusively for the business.
What if a partner profits from firm property?
Subject to contract, section 16(a) requires the partner to account for that profit and pay it to the firm.
Does section 15 decide what is firm property?
No. Section 14 identifies firm property; section 15 governs how it is held and used.
Need help applying this provision to your situation?
Contact BizeneedLast updated 11 October 2026