Everything you need to know about what is partnership. The partnership deed is a must for a partnership. Indian Partnership Act defines certain rights and duties of a partner, but mostly the provisions of the Act come into operation only when there is no agreements among the partners. If there is no agreement, differences may develop. The partnership firm may [...]
The formation of partnership is very easy. Simply an agreement among the partners in oral or written words can bring a partnership into existence. It includes very less legal formalities and expenses.
The Indian Partnership Act makes a distinction between dissolution of firm and dissolution of partnership. Section 39 provides that the dissolution of partnership between all the partners of a firm is called the dissolution of the firm.
Partnership is formed by an agreement. The agreement nay be verbal or in writing or may be inferred from the conduct of the partners. To avoid future disputes and differences between the partners it is desirable to have a written agreement.
Partner who takes an active part in the management of the business is called active partner. He may also be called 'actual' or 'ostensible' partner. He is an agent of the other partners in the ordinary course of business of the firm and considered a full fledged partner in the real sense of the term.
The partnership may be broadly divided into two kinds such as general partnership and limited partnership. The partnership arises from agreement among persons who share the profits of a business with joint and separate liability, the business being carried on by all the partners or any of them acting on behalf of others.
Co-ownership means joint ownership of some property which does not necessarily result in partnership. In partnership, the partners are necessarily co-owners of the proper the firm, but in co-ownership the co-owners are not necessarily partners. The enterprise may also go for business of co-ownership.
The difference between a partnership and sole proprietorship form of business may be follows. This helps the entrepreneur in selecting form of business of his choice.
If the entrepreneur individually unable to take up the business because of shortcomings attached to sole proprietor form of business, he may go for partnership form of business nose characteristics or essential features are as follows:
A sole proprietorship as one man business is characterized by limited financial resources limited managerial capability, unlimited liability for the obligations of the business etc. to mention a few.