1. Legal Capacity of a Partnership Firm

A partnership firm, though not a separate legal entity, can hold property through its partners.

• The Indian Partnership Act, 1932, allows firms to operate in a business name.
  
• The firm acts through its partners as a collective body.
  
• Property is held in the name of the firm but owned jointly by partners.
  
• The law recognizes the firm’s assets for business and legal purposes.
  
• The firm can sue or be sued concerning its property rights if registered.

2. Types of Property a Firm Can Own

A partnership firm can own various forms of assets necessary for its business.

• Immovable property, like land and buildings, can be acquired.
  
• Movable property, such as equipment, inventory, and furniture, is permitted.
  
• Intellectual property, like trademarks and copyrights, can be held.
  
• Vehicles and office assets can be registered under the firm’s name.
  
• All assets must be used for lawful business objectives.

3. Ownership Rights of Partners

The property of the firm is not the personal property of any partner.

• Partners are collective owners but have no individual claim.
  
• No single partner can sell or mortgage the firm’s property without consent.
  
• Use of property must align with business interests and firm agreement.
  
• Profit from such property is shared as per the partnership deed.
  
• Partners hold a beneficial interest rather than a legal title individually.

4. Property Handling During Firm Changes

Property ownership remains consistent even when the firm structure changes.

• On the admission of a new partner, the property does not automatically transfer.
  
• Retiring partners are entitled to their share in the firm’s assets.
  
• On dissolution, property is valued and distributed accordingly.
  
• Death or insolvency of a partner affects property rights as per the deed terms.
  
• Legal procedures must be followed to transfer or liquidate assets.

5. Documentation and Legal Records

Maintaining proper records is essential for securing the firm’s property rights.

• All acquisitions should be recorded in the firm’s books of account.
  
• Title documents should reflect the firm’s name or authorized partners.
  
• The partnership deed must clearly state the treatment of firm property.
  
• Registration and compliance must follow local laws and regulations.
  

Documentation supports legal claims and operational transparency.