Partnership is a form of business organisation where two or more persons agree to carry on a business and share profits. The business is carried on by all partners or by any one of them acting for all.
Definition (common exam line): Partnership is the relation between persons who have agreed to share profits of a business carried on by all or any of them acting for all.
Partnership deed is a written agreement that states the terms and conditions of partnership. It provides clarity and helps avoid disputes among partners.
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Business organization, an entity formed for the purpose of carrying on commercial enterprise. Such an organization is predicated on systems of law governing contract and exchange, property rights, and incorporation.
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Partnership is a form of business organisation where two or more persons agree to carry on a business and share profits. The business is carried on by all partners or by any one of them acting for all.
Definition (common exam line): Partnership is the relation between persons who have agreed to share profits of a business carried on by all or any of them acting for all.
Partnership deed is a written agreement that states the terms and conditions of partnership. It provides clarity and helps avoid disputes among partners.
Registration means getting the partnership firm registered with the Registrar of Firms by filing prescribed forms and fees. Registration is optional in many cases, but it is advisable.
If a firm is not registered:
Dissolution means termination of partnership relation. It may be:
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Partnership requires two or more persons who enter into an agreement to carry on a lawful business. There must be an intention of sharing profits (losses generally follow profit sharing unless agreed otherwise). The most important element is mutual agency, meaning the business is carried on by all or any one acting for all and each partner can bind the firm.
Partnership deed is important because it clearly defines rights and duties and helps avoid disputes. It generally includes clauses about name and nature of business, capital contribution, profit and loss ratio, interest on capital/drawings, salary/commission, duties and powers of partners, admission/retirement/expulsion, goodwill valuation, accounts and audit, and dissolution and dispute settlement (arbitration clause).
Partnership is the relation between persons who have agreed to share profits of a business carried on by all or any one of them acting for all. It is a popular form of organisation for small and medium businesses.
Essential elements/features of partnership:
Thus, partnership is created by agreement, involves profit-sharing and is distinguished by the principle of mutual agency.