Question

Define partnership and state its important features.

Answer 1

Explanation:

Partnership means association of two or more persons who can pool in required resources like capital, knowledge, expertise, skill, etc. in such a way, that together they can form a cohesive team leading their business towards achievement of their common goals successfully.

Features of partnership:

1.Liability: Partners are jointly as well as individually

liable for payment of debts and this liability is unlimited. When assets of the business are not sufficient to pay for its liabilities in full, personal assets of the partners can be used for making the payment.

2.Risk bearing : The risk involved in running the business is jointly borne by the partners.Both

profits and losses are shared by them in the preagreed ratio.

3.Membership: Minimum two members are required to start a partnership business, while the maximum number of partners should not exceed twenty, in case of banking number of partners should be ten.

Answer 2

Partnership:

A legal form of business operation between two and more individuals who share management and profit is called as partnership.

Feature of partnership:

The features of partnership are listed below:

i) Unlimited Liability

ii) Membership  

iii) Sharing of profit and loss

iv) Mutual agency  

v) Voluntary registration  

vi) Continuity  

vii) Contractual relationship

viii) Transfer of interest