Sections 22 explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
Section 22 says how an act or document must be done to bind the firm: in the firm name or in another manner showing an intention to bind the firm. Section 23 makes an admission or representation by a partner, made in the ordinary course of business, evidence against the firm. Section 24 treats notice to a partner who habitually acts in the business as notice to the firm, except in a case of fraud on the firm.
To bind a firm, an act or instrument done or executed by a partner or other person on its behalf must be done or executed in the firm name or in any other manner expressing or implying an intention to bind the firm (section 22). An admission or representation made by a partner about the firm's affairs in the ordinary course of business is evidence against the firm (section 23). Notice to a partner who habitually acts in the business about any matter relating to the firm's affairs operates as notice to the firm, except in the case of a fraud on the firm committed by that partner or with his consent (section 24). The text does not open any of these with "subject to contract between the partners".
Section 22: how to bind the firm
Section 22 is one sentence with one test: in order to bind a firm, an act or instrument done or executed by a partner or other person on behalf of the firm shall be done or executed in the firm name or in any other manner expressing or implying an intention to bind the firm.
| Element | Text |
|---|---|
| Who may act | A partner or other person on behalf of the firm |
| What | An act or an instrument (a document) |
| How | In the firm name, or in any other manner expressing or implying an intention to bind the firm |
Points to note:
- "Or other person". The section is not limited to partners. An agent or employee authorised to act for the firm must also act in the firm name or in a manner showing an intention to bind it.
- Firm name is not the only way. The words "expressing or implying an intention to bind the firm" leave room for other ways, such as a letterhead, a rubber stamp, or the wording of the contract. The text does not list them.
- Link with section 19. Section 19(1) says an act of a partner in the usual way of business binds the firm "subject to section 22". Both conditions matter: the act must be of the right kind and must be done in the right manner. See sections 18 and 19.
Example. Hari, a partner in "Hari & Sons Traders", signs a purchase order as "Hari & Sons Traders, by Hari, Partner". That is in the firm name and shows an intention to bind the firm. If he signs only as "Hari" on a plain sheet for goods that are plainly meant for himself, there is no sign of an intention to bind the firm.
For help in deciding how your firm should sign contracts, banking documents and agreements, you can take a legal consultation and bring your deed and sample documents.
Section 23: effect of admissions by a partner
Section 23 says that an admission or representation made by a partner concerning the affairs of the firm is evidence against the firm, if it is made in the ordinary course of business. (The copy we consulted prints "on representation"; read by sense, the text means "or".)
| Element | Text |
|---|---|
| What | An admission or representation by a partner |
| About | The affairs of the firm |
| Condition | Made in the ordinary course of business |
| Effect | It is evidence against the firm |
Points to note:
- Evidence, not conclusive proof. The text says "evidence against the firm", so the statement counts as evidence. The text does not say it settles the matter finally.
- Ordinary course only. A statement made outside the ordinary course of business is not covered by this section.
- Any partner. The section speaks of "a partner", not of a managing or authorised partner.
Example. A customer emails Ila, a partner in a catering firm, claiming that Rs 50,000 is owed to him. Ila replies in the ordinary course of business: "Yes, the amount of Rs 50,000 is pending; we will pay next month." That reply can be used as evidence against the firm.
Compare section 19(2)(e), under which implied authority does not empower a partner to admit any liability in a suit or proceeding against the firm.
Section 24: notice to an acting partner
Section 24 says that notice to a partner who habitually acts in the business of the firm of any matter relating to the affairs of the firm operates as notice to the firm, except in the case of a fraud on the firm committed by or with the consent of that partner.
| Element | Text |
|---|---|
| Who receives notice | A partner who habitually acts in the business of the firm |
| Subject | Any matter relating to the affairs of the firm |
| Effect | Operates as notice to the firm |
| Exception | Fraud on the firm committed by that partner or with his consent |
Points to note:
- Habitually acts. Notice to a partner who does not habitually act in the business is not covered by the wording of this section. The text does not define "habitually".
- Notice to one is notice to all (the firm). A third party need not serve every partner separately; serving the acting partner is enough in the stated cases.
- The fraud exception. If the notice relates to a fraud on the firm committed by that partner, or with his consent, it does not count as notice to the firm. The reason is that he would not pass on information that exposes his own fraud.
Example. A supplier sends a written notice of a price change to Jai, the partner who handles all purchases daily. Jai does not pass it on. The notice operates as notice to the firm. But if Jai is secretly diverting the firm's funds and the notice concerns that, the fraud exception applies.
What can the deed change?
None of these three sections opens with "subject to contract between the partners". The partners can agree between themselves who signs or receives notices, but the text does not say such an arrangement changes the effect of these sections against outsiders.
Practical points
- Sign in the firm name on every contract, cheque and letter, for example "For ABC & Co., , Partner".
- Watch what you write. Emails and letters from any partner about the firm's affairs can later be used as evidence against the firm.
- Pass on notices. Notice to the acting partner is notice to the firm, so share them internally.
Need help with your firm's signing and notice practices?
Small habits in signing, replying and receiving notices can decide who is bound later. If you want to set simple, written rules for your firm, speak to us for a legal consultation and we will go through your documents with you.
Key takeaways
- To bind a firm, an act or instrument must be done in the firm name or in another manner showing an intention to bind the firm (section 22).
- A partner's admission or representation about the firm's affairs, made in the ordinary course of business, is evidence against the firm (section 23).
- Notice to a partner who habitually acts in the business operates as notice to the firm, except in a case of fraud on the firm (section 24).
- None of the three sections opens with "subject to contract between the partners".
Read next
- Sections 20 and 21: restricting implied authority and authority in an emergency
- Sections 25 to 27: liability of partners and firm for acts and wrongs
- Section 28: holding out
- Rights of partners under the Partnership Act
Disclaimer: Based on the text of the Indian Partnership Act, 1932 as consulted on 1 October 2026. Several States have amended the registration chapter and make their own rules, forms and fees for the Registrar of Firms. This article is general information, not legal advice; check the official text and your State's rules before acting.