ABOUT
A Partnership is where two (or more) people join hands to carry out a business for profit. The partners become joint business owners and carry out operations governed by the partnership deed. However, in a partnership firm the partners are jointly and individually liable for debts of the firm. These firms are governed by the Indian Partnership Act, 1932. Partnership may be registered or not. However, registration of partnership firm has their own benefits.
FEATURES OF PARTNERSHIP
- The partnership arises out of an agreement between two or more persons
- There should be an agreement among the partners to share the profits of the business
- The business to be carried on by a partnership must always be lawful
- There must be at least two persons to form a partnership. The maximum number is 20. But in case of banking business the maximum is 10 members
- The liability of every partner is unlimited, joint and several
- Every partner is an agent of the firm. He can act on behalf of the firm. He is responsible for his own acts and also for the acts done on behalf of the other partners
- The firm and the partners are one. When a contract is made in the name of the firm all the partners are responsible for it individually and collectively
- A partner cannot transfer his share of interest to others without the consent of the other partners