Explain the basic characteristics of a partnership.
Solution
There must be at least two or more persons to form Partnership.
There must be agreement between partners and such agreement can be Oral or Written. The
agreement forms the basis of Mutual rights and duties of Partners.
Partnership can be formed for the purpose of carrying on some business with the intension of
earning some profit.
The Agreement must include how the profit or loss to be shared. If the persons joins firm for
some Charity then it will not be called partnership and if the persons is deprived of his right to
share the profit then he/she will not be called partner. And it is not necessary that all partner
share loss also, it may be agreed between partners that some oo one of the partners will not be
liable for losses.
All the persons have Unlimited liability i.e. if the assets of the company is not sufficient to pay
the liabilities then the Creditors can come after the personal property of the Partners.
In the eyes of Law, A partner and Partnership firm are same, i.e. Partnership firm doesn’t have
its own Legal identity.
The business must be Legal..
Explain the basic characteristics of a partnership.SolutionThe.pdf
1. Explain the basic characteristics of a partnership.
Solution
There must be at least two or more persons to form Partnership.
There must be agreement between partners and such agreement can be Oral or Written. The
agreement forms the basis of Mutual rights and duties of Partners.
Partnership can be formed for the purpose of carrying on some business with the intension of
earning some profit.
The Agreement must include how the profit or loss to be shared. If the persons joins firm for
some Charity then it will not be called partnership and if the persons is deprived of his right to
share the profit then he/she will not be called partner. And it is not necessary that all partner
share loss also, it may be agreed between partners that some oo one of the partners will not be
liable for losses.
All the persons have Unlimited liability i.e. if the assets of the company is not sufficient to pay
the liabilities then the Creditors can come after the personal property of the Partners.
In the eyes of Law, A partner and Partnership firm are same, i.e. Partnership firm doesn’t have
its own Legal identity.
The business must be Legal.
