Question

Prabhat and Rishi are doing separate business in installing centralized air conditioning units in Mumbai. They enter into a partnership contract to install centralized AC unit in a hotel in Shirdi. Identify the type of partnership being highlighted in the given case​

Answer 1

Answer:

Contractual partnership

Answer 2

The type of partnership highlighted in the given case is a "General Partnership".

• It is a partnership where two or more individuals join hands to carry out a business and share the profits and losses in the agreed ratio.

• In this case, Prabhat and Rishi are two individuals who have separate businesses in installing centralized air conditioning units in Mumbai.
• They have entered into a partnership to install a centralized AC unit in a hotel in Shirdi.
• Since they are carrying out a business activity together and sharing profits and losses in an agreed ratio, it can be inferred that they have formed a general partnership.

• All partners in a general partnership are jointly and severally liable for the debts and obligations of the partnership indefinitely.
• This means that their personal assets are also at risk in case the partnership faces financial difficulties.
• All partners, however, have an equal say in the company's management and are eligible to share in the profits in exchange for the risk.

To learn more about partnership from the given link.

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