Importance, History, and Application of Partnership Act, 1935 in Pakistan

 Author: Fazila Nawaz

The partnership has come into practice since the very long history of business and trade. The history of partnership is traced back to medieval times in Europe and the Middle East. The commercial revolution further developed it and let it formally become legalized in different jurisdictions. The partnership strengthens the mutual involvement of partners in a business. It helps the partners to save time, money, expertise, knowledge and to get long-lasting success in the business world. Through the ages of time, the forms of partnership are developed into general partnership, joint liability partnerships, limited liability partnerships, etc.

The partnership Act that Pakistan abides by is a product of British rule during the Sub-continent. It was enacted embedding the English principles keeping in mind the usage, custom of trades, and commercial people of India. Partnership Act was the first part of the Contract Act, 1872. The advanced development of trade and business forced the legislation of the Subcontinent to stretch the ambit of partnership provisions. Thereby, the Partnership Chapter XI was repealed and Partnership Bill was introduced in the legislative assembly during sessions in January 1931. It was adopted as a law in April 1932 and was enforced in 1933.     

The Partnership Act applies to the whole of Pakistan, yet section 71 of the Act has conferred the powers to the provincial government to make laws for their respective provinces that resonate with this Act. Consequently, Punjab Partnership (Registration of Firms) Rules, 1932, North-West Frontier Province Partnership Rules, 1932, and Sindh Partnership Rules, 1932 are the provincial laws regulating the partnership laws in the provinces.

In 2018, the Chief Minister of Gilgit Baltistan held a meeting with the Gilgit Baltistan Board of investment where it was decided to prepare the Gilgit Baltistan Public-Private Partnership Act and Board of Investment Policy.  Gilgit Baltistan has signed its first public-private partnership agreement in 2020 with the Industrial promotion Service to form first run of river power project in GB.