What is touchstone of partnership ? Explain.
Answers
Explanation:
TOUCH OF PATNERSHIP:
Partnership by making a written or oral agreement stating that they will carry on a business jointly.Rights and obligations of partners and will share the profits therefrom.
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Answer:
A partnership is a formal agreement between two or more party to manage and operate a business and share its profit.
Explanation:
Whether or not a business which is jointly being operated by two or more person is a partnership is an important and difficult question. To make a judgement, it is important keep in mind the charactersuc features of partnership because, sometimes, a contract bet tws or more persons that appears to be a partnership is, in fact, not a partnership. Like contract which apparently does not seem to be a parmership might, in reality, be a partners To determine whether or not the contract between two or more persons is a partnership touchstone is the mutual relations of the parties and the type of business in which the are engaged.
The following points need to be kept in mind in making a decision on the issue:
1. the relation of partnership arises from contract ,not from status
2. sharing of profit
3. mutual agency
4. participation in management
5. legal business
6. numbers of members
7. access to books and accounts.
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