Answer in one sentence only.
1) What is partnership?
2) Which act is applicable to partnership business?
What is partnership deed ?
How many persons are required to form partnership business?
Who is called nominal partner?
Why is partnership deed prepared ?
What do you mean by Fixed Capital Method ?
What is Fluctuating Capital Method ?
9) When is partner's current account opened?
10) Who is called minor partner?
11) What are the methods of maintaining partners capital accounts
12) What is the relation between the partners ?
13) What is the liability of partners ?
Answers
Answer:
1. A partnership is a form of business where two or more people share ownership, as well as the responsibility for managing the company and the income or losses the business generates.
2. The Indian Partnership Act, 1932. The Indian Partnership Act 1932 defines a partnership as a relation between two or more persons who agree to share the profits of a business run by them all or by one or more persons acting for them all.
3. A partnership deed, also known as a partnership agreement, is a document that outlines in detail the rights and responsibilities of all parties to a business operation.
4. According to the Companies Act, 2013, the minimum number of persons required to form a partnership form of business is 2. Whereas the maximum number of members in case of partnership firm should not exceed 100.
5. A nominal partner is a partner in the business who has no actual interest in the trade or its profits.
6. A partnership deed provides a legal liability between partners of the firm. It also states the profit sharing ratio, nature of business, name-address of the partners as well as firm.
7. Fixed capital is capital or money that we invest in fixed assets. In other words, money that we invest in assets of a durable nature.
8. Fluctuating Capital method is that method of keeping the account of the partners in which the capital in the account of the partner keep fluctuating.
9. In case of fixed capital method,current accounts are opened to record for all other adjustments like salary,commission,interest on capital,loans and drawings etc. Partners capital account shows a fixed balance year after year.
10. Minor partner is a person who is below 18 years old.
11. Capital accounts of partners of a firm may be maintained by following two methods: (i) Fixed capital method and (ii) Fluctuating capital method. Amount invested by partners in the partnership business is called partners' capital.
12. Each partner has a right to share in the profits of the partnership. Unless the partnership agreement states otherwise, partners share profits equally.
13. In unlimited partnership, every partner is liable, jointly with all the other partners and also severally, for all acts of the firm done while he is a partner.
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1. What is partnership?
Ans:-A legal form of business operation between two or more individuals who share management and profits.
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2.Which act is applicable to partnership business?
Ans :-Indian Partnership Act is applicable to partnership business.
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3 What is partnership deed ?
Ans :-A partnership deed is a written document that contains terms and conditions agreed between the partners who enter together in a partnership venture for profit making.
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4 How many persons are required to form partnership business?
Ans :- Two or more than two person are required to form partnership business.
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5 Who is called nominal partner?
Ans :-A person who neither has ownership or activities involvement in any firm's affair but has a strong interest in the success of partnership firm.
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6 Why is partnership deed prepared ?
Ans :-A partnership deed is prepared to establish a partnership officially that has all the terms and conditions associated with it to avoid disputes in future.
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7 What do you mean by Fixed Capital Method ?
Ans :-The fixed capital is money that we invest in assets of a durable nature. These are assets that we repeatedly use over a long period.
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8 What is Fluctuating Capital Method ?
Ans:-Fluctuating Capital method is that method of keeping the account of the partners in which the capital in the account of the partner keep fluctuating.
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9) When is partner's current account opened?
Ans:-When partnership form adopts fixed capital method, it opens partners’ current accounts to record dealing of partners with partnership firm.
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10 Who is called minor partner?
Ans:-A minor is a person who is below 18 years' of age. Minors are generally admitted to the benefits of a partnership firm, meaning, a person who may not be a partner in a firm, but, with the consent of all the partners for the time being, he may be admitted to the benefits of partnership.
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11 What are the methods of maintaining partners capital accounts?
Ans :-There are two methods of maintaining capital Accounts of partners:-
(i)Fixed Capital Method:-
In this method two accounts of each partner are maintained i.e Capital and Current Account. Balance in Capital Account remains the same except when new capital is introduced or withdrawn. All adjustments like profit,loss,interest on capital,drawings,salary,commission etc are made through current account.
(ii) Fluctuating Capital Method:-
In this method, only one account is maintained i.e Capital Account. The balance in capital account changes every year because of all adjustments like profits/losses,drawings,interest,salary etc. Fluctuating capital account may sometimes show a debit balance.
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12 What is the relation between the partners?
Ans :-Each partner has a right to share in the profits of the partnership. Unless the partnership agreement states otherwise, partners share profits equally. Moreover, partners must contribute equally to partnership losses unless a partnership agreement provides for another arrangement. In some jurisdictions a partner is entitled to the return of her or his capital contributions.
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13 What is the liability of partners?
Ans :- In a general partnership, each partner has unlimited personal liability. Partnership rules usually dictate that whatever debts are incurred by the business, it is the legal responsibility of all partners to pay them off.
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