Question

How are partnership firms started ? Explain briefly.

Answer 1

➡Generally, to determine whether a partnership existed, a court will ask whether there was a sharing of profits and losses,

↪joint administration and control of the business, a capital investment by each partner, and common ownership of property.


➡A partnership is defined as the relation between persons who have agreed to share the profits of a business carried on by all or any of them acting for all.

➡The law does not require writtenpartnership agreement between the partners to form a partnership.

Answer 2

Partnership firms is a concept, that started in Europe somewhere in 13th century.

The concept provided a lot of advantages to the people from different verticals to come together and trade in the common business.

Later it gave rise to the agreements, that is formed among the partners who lend into a common consensus for the profit and loss in the business with the equal opportunities and liabilities shared collectively.