The document outlines the definition and characteristics of partnership under the Indian Partnership Act 1932, highlighting the essential elements such as profit sharing, agreement, management, and unlimited liability. It emphasizes that partnerships are formed through voluntary agreements often documented as partnership deeds, which include details like firm name, partners' information, capital contributions, and profit-sharing ratios. Additionally, it distinguishes between fixed and fluctuating capital accounts used in partnership accounting.

2. PARTNERSHIP
ACCOUNTS

7. INDIAN
PARTNERSHIP ACT
1932

8. Definition of PARTNERSHIP
According to Sec.4 of the
Indian Partnership Act 1932,
“Partnership is the relation between
persons who have agreed to share
the profits of a business carried on
by all or any of them acting for all”

10. Characteristics of a Partnership
* Association of Two or More Person
* Agreement
* Business
* Profit Motives
* Management
* Implied Agency
* Unlimited Liability

11. * Association of Two
or More Person

13. Agreement
• Partners should voluntarily
enter into an agreement . It
may be express or implied.

14. * Business
The object of the agreement is to do
some lawful business or profession.

15. Profit Motives
• The Object of the business is to earn
profit and all the partners should share
the profit or loss equally or in an
agreed ratio.

16. * Management
Each partner has a right to participate
in the Management of the affairs of the
partnership business.

17. Implied Agency
The act of one partner shall bind the other
partners and also the firm.

18. * Unlimited Liability
Partners are jointly and severally liable
for all the debts incurred by the firm.

19. Partnership Deed
Partnership is based on an agreement between all the
partners. The agreement may be oral or in writing. To avoid
future quarrels, it is better to have the agreement in writing.
When the agreement is written and signed by all the
partners, it is called as a “Partnership Deed”.

20. Contents of the Partnership Deed
1. Name of the firm
2. Date of constitution of the firm
3.The principal business place of the firm
4. The names, addresses, occupations and age of the partners
5. The capital contribution by each partner
6. The maximum permitted amount of drawing for each partner
7. The interest chargeable on capital and on drawings.
8. The profit sharing ratio
9. The salary, rent, commission, etc., payable to the partners.
10. Provisions for admission of a new partner or retirement of an existing
partner
11. Keeping of the accounts and their audit
12. The management of the firm
13. Any other matter connected with business

21. Nature of Partnership Accounts
1. Capital Accounts
2. Drawings or Current Accounts

22. Fixed Vs. Fluctuating Capitals
1. Fixed Capital Account
2. Fluctuating Capital Account

23. Specimen Capital Accounts
1. Specimen of Fluctuating Capital Accounts
2. Specimen of Fixed Capital Accounts

24. Fixed Vs. Fluctuating Capitals
1. Fixed Capital Account
2. Fluctuating Capital Account

25. Specimen Capital Accounts
1. Specimen of Fluctuating Capital Accounts

26. 2. Specimen of Fixed Capital Accounts

27. Enjoy the Day