Explain the features of partnership firm.
Answers
Answer:
Explanation:
Features in a partnership firm
1- Two or more partners
In this feature, there is the basic requirement of this type of business having at-least 2 minimum partners or members to be able to form the business.
2-Sharing of profits and losses
This is an advantage and disadvantage both. Advantage because you can share your losses with the partners, depending on their profit and loss ratio set. But you must share the profits as well.
3-No separate legal identity
This means that the partners in the business are not treated as separate people. Everyone must bear the burden of debts when losses take place.
4-Partnership deed must be signed
This is a compulsory document laying down the facts and clauses. To be signed by all partners. It includes what duties each partner will be doing and whats their ratio in the partnership, for profits and losses as well as what type of partner they are. Are they sleeping partners, nominal or working.
Answer:
Features of partnership firm :
* Large Resources
* Eligibility of partners
* Flexibility in operation
* No separate legal existence
* Sharing of Profits and Losses:
* Liability:
* Ownership and Control
* Mutual Trust and Confidence
Large Resources : Due to more number of partners the partnership firm has larger resources for business operations as compared to sole proprietorship firm
Eligibility of partners : since individual join hand to become partners, it is necessary that they must be competent to enter into a partnership.