SUB TOPICS DEFINITIONREGISTRATION ELEMENTS OF OF A FIRM PARTNERSHIP FORMATION TYPES OF OFPARTNERSHIPS PARTNERSHIP DIFF CLASSES OF PARTNERS
DEFINITION A legal form of business operation between two or more individuals who share management and profits.
ELEMENTS OF PARTNERSHIP 1) PERSONS 2) RESTRICTION ON THE NO OF PERSON 3) WHO HAVE AGREED 4) THE PROFIT OF A BUSINESS 5) CARRIED ON BY ALL 6) MUTUAL AGENCY
FORMATION OF A PARTNERSHIP1) THE DEED OF PARTNERSHIP: Partnership deed is the document that deals with the rights and obligations of the partnership. 2) WHO MAY BE PARTNERS: Major, sound mind etc
DIFFERENT CLASSES OF PARTNERS 1) ACTIVE PARTNERS 5) PARTNERS 2) DORMANT SHARING OR SLEEPINGPROFITS ONLY PARTNERS 4) SUB 3) NOMINAL PARTNERS PARTNERS
1) Active partners: The partners who actively participate They contribute capital2) Dormant, or sleeping Partners: Do not participate. Only contribute capital
3) Nominal partners: allow the firm to use their “name” as a partner. They do not invest any capital4) Sub partners: If a partner wants to share his profits to others he can enter into the partnership with others stating the profit sharing levels or ratio.5) Partners sharing profits only: Partners who does not like loss bearing can enter into partnership sharing only the profit.
3 TYPES OF PARTNERSHIP PARTNERSHIP 3) LIMITED 1) GENERAL 2) LIMITED LIABILITYPARTNERSHIP PARTNERSHIP PARTNERSHIP
1) GENERAL PARTNERSHIP Each general partner takes part in the management of the business. If one partner is sued, all partners are held liable.
2) LIMITED LIABILITIES A limited partner does not participate, and his liability is limited. They only provide an investment and receive a share of the profits.
3) LIMITED LIABILITY PARTNERSHIP closer to a limited liability company (LLC). In the LLP, all partners have limited liability. partners involved in wrongful or negligent acts are still personally liable, but other partners are protected from liability for those acts.
MINOR AS A PARTNER In special cases a minor can be admitted as partner with certain conditions. A minor can only share the profit of the business. In case of loss his liability is limited to the extent of his capital contribution for the business.
REGISTRATION OF FIRMS Business registration is very important in running a business. Registration of a company is very important as there are many provisions in the company registration.