PARTNERSHIP
Partnership is a popular form of business for small and medium scale business.As the size of the business grows,one person is not enough to carry on managerial activities.Therefore two or more persons form partnership to carry on business. this form of business starts to overcome the problems of sole proprietorship{a business owned ,managed and controlled by a single individual is known as a sole proprietorship organization}
MEANING AND DEFINITIONS OF PARTNERSHIP
Partnership is an association of two or more persons who agree to jointly pursue a business activity.They pool their managerial and financial resources for the purpose.
Definitions
Partnership is the relation between two or more persons who have agreed to share the profits of the business carried on by all any of them acting for all.-By The Indian Partnership Act, 1932.
Partnership may be defined as the relation between the persons who agree to carry on a business in common with a view to private gain.-By L.H.Honey
A partnership firm is a group of men who have joined capital or services for the prosecuting of some enterprise.-By Kimball
Partnership has two or more members, each of whom is responsible for the partnership.Each of the partners may blind the others for debts of the partnership._By William R.Sprigel.
FEATURES OF PARTNERSHIP
1.Membership
2.Agreement
3.Business
4.Profit sharing
5.Liability
6.Mutual Agency Relationship
7.Non transferability of share
8.Registration
9.Management
10.Time period
Explanation of features
1.Membership:-There must be minimum two member to form a partnership firm.Maximum there can be 20 members.In case of banking business maximum members can be only ten.
2.Agreement:-There must be an agreement between the partners to form a partnership . This agreement can be oral or written.The document containing the agreement of partners is known as partnership deed.
3.Business:-A partnership may undertake any lawful business activity.The partnership can be formed only for the purpose of carrying on business,which is legal.Joint Robbery or smuggling carried by two or more persons cannot be considered as partnership.
4.Profit sharing:-The partners of partnership firm in the ratio specified in the agreement .In case no ratio is specified in the agreement then the profit is divided equally among all the members.
5.Liability:-The liability of all members of a partnership firm is unlimited.The partners are individually and collectively liable to pay backthe debts of firm. At the time of loss if the firms assets are not sufficient to pay back the debts then the creditors can have claim over the personal property of the partners also.
6.Mutual Agency Relationship:-Every partner is the owner as well as the agent of the firm and agent of other partners.The acts of one partner are binding on other partners.Each partner is entitled to take part in the management and enter into contract with outsiders.The contract signed by any one partner is binding on other partners.Partnership business can be carried on by all the partners or by any of them acting on behalf of the others.
7.Non transferability of share:-No partner can transfer his/her share in the partnership to any other person He can do so only with the consent of other partners.If the partner wants to leave the firm then he can do so by giving a notice of retirement.
8.Registration:-According to partnership Act 1932, it is not compulsory for a partnership to to get itself registered. however,the partners prefer to get the partnership firm registered because there are certain advantages of registration.
9.Management:-All the partners are allowed to manage to marriage the partnership firm .They may specify the work area of each partner in the partnership deed also.Generally day to day management is carried on by one or two partners whereas for crucial decisions all the partners are consulted.
10.Time period:-The partnership firm continues till all the partners desire to continue it .Legally it comes to an end at the retirement or death of any one partner.even after retirement and death also the partnership firm can continue if all the remaining partners agree. In that case ,they settle the claim of outgoing partner and then continue with the business.
Partnership is a popular form of business for small and medium scale business.As the size of the business grows,one person is not enough to carry on managerial activities.Therefore two or more persons form partnership to carry on business. this form of business starts to overcome the problems of sole proprietorship{a business owned ,managed and controlled by a single individual is known as a sole proprietorship organization}
MEANING AND DEFINITIONS OF PARTNERSHIP
Partnership is an association of two or more persons who agree to jointly pursue a business activity.They pool their managerial and financial resources for the purpose.
Definitions
Partnership is the relation between two or more persons who have agreed to share the profits of the business carried on by all any of them acting for all.-By The Indian Partnership Act, 1932.
Partnership may be defined as the relation between the persons who agree to carry on a business in common with a view to private gain.-By L.H.Honey
A partnership firm is a group of men who have joined capital or services for the prosecuting of some enterprise.-By Kimball
Partnership has two or more members, each of whom is responsible for the partnership.Each of the partners may blind the others for debts of the partnership._By William R.Sprigel.
FEATURES OF PARTNERSHIP
1.Membership
2.Agreement
3.Business
4.Profit sharing
5.Liability
6.Mutual Agency Relationship
7.Non transferability of share
8.Registration
9.Management
10.Time period
Explanation of features
1.Membership:-There must be minimum two member to form a partnership firm.Maximum there can be 20 members.In case of banking business maximum members can be only ten.
2.Agreement:-There must be an agreement between the partners to form a partnership . This agreement can be oral or written.The document containing the agreement of partners is known as partnership deed.
3.Business:-A partnership may undertake any lawful business activity.The partnership can be formed only for the purpose of carrying on business,which is legal.Joint Robbery or smuggling carried by two or more persons cannot be considered as partnership.
4.Profit sharing:-The partners of partnership firm in the ratio specified in the agreement .In case no ratio is specified in the agreement then the profit is divided equally among all the members.
5.Liability:-The liability of all members of a partnership firm is unlimited.The partners are individually and collectively liable to pay backthe debts of firm. At the time of loss if the firms assets are not sufficient to pay back the debts then the creditors can have claim over the personal property of the partners also.
6.Mutual Agency Relationship:-Every partner is the owner as well as the agent of the firm and agent of other partners.The acts of one partner are binding on other partners.Each partner is entitled to take part in the management and enter into contract with outsiders.The contract signed by any one partner is binding on other partners.Partnership business can be carried on by all the partners or by any of them acting on behalf of the others.
7.Non transferability of share:-No partner can transfer his/her share in the partnership to any other person He can do so only with the consent of other partners.If the partner wants to leave the firm then he can do so by giving a notice of retirement.
8.Registration:-According to partnership Act 1932, it is not compulsory for a partnership to to get itself registered. however,the partners prefer to get the partnership firm registered because there are certain advantages of registration.
9.Management:-All the partners are allowed to manage to marriage the partnership firm .They may specify the work area of each partner in the partnership deed also.Generally day to day management is carried on by one or two partners whereas for crucial decisions all the partners are consulted.
10.Time period:-The partnership firm continues till all the partners desire to continue it .Legally it comes to an end at the retirement or death of any one partner.even after retirement and death also the partnership firm can continue if all the remaining partners agree. In that case ,they settle the claim of outgoing partner and then continue with the business.
Partnership reduces the pressure of risks on the partners.
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