2. Rawat Mahila B.ed College
Session 2016-2017
Submitted by – Submitted To – Dr. Poornima Bhartiya
Name : Ridhima Bhatia
Class : B.ed Ist year
Roll No. 16345
Subject: Book Keeping and Accountancy
Date : 18th September 2017
5. Meaning
According to The Indian Partnership Act 1932
“ Partnership is the relation between the two or more
persons who have agreed to share the profits of a
business carried on by all of them or any of them
acting for all.
6. Characteristics of a Partnership Firm
• The partnership is the result of a contract or an
agreement that is entered into between the
partners.
• It does not arise from birth , status or inheritance
or succession.
• The agreement may be written or oral.
Agreement
• The contract or agreement between the persons
may be oral or written. But usually the contract is
in writing.
Nature of
Agreement
• The persons who form the partnership must be
competent or must have the capacity to enter into
contract.
• Persons who do not have the capacity to enter
into contract such minors, insolvents, lunatics
cannot become partners.
Competence
to enter into
contract
7. Characteristics of a Partnership Firm
• To form the partnership at least 2 persons are
required.
• The maximum number of partners is limited to
20 , incase of general type of business and 10 in
case of banking services.
Number of
Partners
• The agreement between the partners must be to
carry out some business which includes all
lawful trade, occupation or profession.
Presence of
Business
• The agreement among the partners is for
making the profit and sharing of the profits
among themselves.
• The partners share the profit in the agreed
proportion.
Sharing of
profits
8. Characteristics of a Partnership Firm
• Each partner acts in two capacities i.e. he is
both an agent and the principal. As an agent he
can bind the other partners by his acts and as a
principal he is bound by the acts of the other
partners.
Principal-
agent
Relationship
• The partnership business must be carried on by
all the partners or by any one or more acting for
all.
Management
• The liability of the partners is unlimited.
• If the firm fails to satisfy its debts, each partner
is liable to repay out of his personal assets.
Unlimited
Liability
9. Characteristics of a Partnership Firm
• A partner cannot without the consent of other
partners transfer his interest in the firm to an
outsider.
Non Transfer
ability of
interest
• Each partner is the joint owner of the property of
the firm and hence in the eyes of the law the firm
and the partner is considered to be one and the
same.
• Partnership has no separate existence apart from
the partners composing it.
Joint
Ownership
• The essence of the partnership is based on the
spirit of cooperation. Hence there must be mutual
trust and mutual cooperation among the partners.
Team Spirit
12. Meaning
• The Document which contains the term of the
partnership as agreed by the partners is called
“Partnership Deed”.
• The deed has to be duly stamped and has to be
duly signed by all the partners.
13. Importance
• Helps avoid conflicts
• Written Record
• Legally Binding
• Helps to set out the roles and
responsibilities of each partner
16. Rules
• Profits or losses will be shared equally among the partners.
• Every partner must take part in the management of the partnership
business.
• No salary or remuneration will be allowed to any of the partners.
• No partner will be admitted without the consent of all existing
partners.
• The partnership books are kept at the place of business of the
partnership and every partner may have access to and inspect and
copy any of them.
17.
18. Evaluation Questions
Q1. Write True or false.
a. Two or more persons enter into partnership for friendship purpose.
b. The liability of partners is unlimited.
c. To form the partnership only 1 person is required. ( )
Q2. What is a partnership deed? ( )
Q3. According to which act partnership is governed? ( )
Q4. What are the rules applicable in absence of partnership deed? ( )
Q5. What is the meaning of partnership? ( )
