define partnership. explain any four feaatures of partnership.
Answers
Answer:
partnership is a state of having a partner in business
Explanation:
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Partnership:
Partnership is a form of business in which two or more people work together in a business and have agreed to share pròfit and loss, carried on by all or any one of them working for all. All the measure decisions of business are taken by the agreement of all the partners.
Features of partnership :
(I) Formation : Formation of a partnership business requires a lègal documentations or agreements wherein the terms and conditions, sharès of pròfits and losses and manner of conducting the business is specified. It is governed by Indian partner's act 1932.
(II) Liability : This is a kind of disadvantage for partnership business that the Liabilities of each partner is unlimited. Personal assets of partners can be sold out for repayment of debt (s).
(III) Continuity : Partnership is characterized by the lack of continuity where even after the ìnsolvency, dèath, rètirement of any partner may result in the closure of business. Other partners have to again pàss an agreement to start their partnership if they are ìnterested so.
(IV) Funds : Partnership business can manage more funds as compared to sole proprietorship. Funds are organised by all the partners and as a result more funds can be organised by the firm which will help them to earn more revenue.
An additional point, currently the limit of a partnership firm is from 2 to 50 which was earlier 100. More than 50 partners is not possible.