A partnership is a business organization owned by two or more persons called partners who come together voluntarily to combine their skills, experience, and resources to make a profit. The key features of a partnership are that it has voluntary association between partners, mutual agency where each partner can act on behalf of the business and bind the other partners, unlimited liability where each partner is personally responsible for the partnership's debts, limited life as it can end when a partner withdraws or dies, and co-ownership of property where assets are jointly owned and distributed based on capital accounts if the partnership dissolves.

1. Partnership
Section 8 Objective 1 & 2
Define a partnership business
State the features of a
partnership

3. Partnership
• is a
– Business organisation owned by two or more persons called
partners for the purpose of making a profit
– Potential business persons choose to form a partnership
company
– They choose to do so rather than forming a sole trading
company or corporation because
• The skills and the experience of partners are combined
• It is easier to form
• Decision making is easier
• of the freedom from observing government regulations and
restrictions

4. Partnership
• Features of a partnership company -Voluntary association
• Where
– Two or more persons coming to together to form a
partnership company voluntarily and not by force
(agreement can be made by a handshake)
– They continue in the business as long as they like and
leaves the company freely

5. Partnership
• Features of a partnership company – Voluntary association

6. Partnership
• Features of a partnership company – mutual agency
• Where
– Each partner can act or do business on behalf of the
partnership company
– The business conducted by any partner on behalf of the
company is binding (that is all partners are bound into
the contract)

7. Partnership
• Features of a partnership – mutual agency

8. Partnership
• Features of a partnership – unlimited liability
• Where
– Each partner is personally and individually liable for all
partnership liabilities
– Creditors first use the partnership assets to settle claims
– If the partnership assets are insufficient, they will seek
settlement of claims from any of the partners personal
resources

9. Partnership
• Features of a partnership – unlimited liability

10. Partnership
• Features of a partnership – limited life
• Where
• A partnership company may end voluntarily at any time for
example when
o a new partner is admitted
o a partner withdraws
• It may also end involuntarily by
o The death of a partner
o Incapacity of a partner

11. Partnership
• Features of a partnership – limited life

12. Partnership
• Features of a partnership – Co-ownership of property
• Where
– Partnership assets are owned jointly by the partners of a
company
– If for some reason the partnership company has to close
down, each partner has claim on the total assets equal
to the balance on his or her respective capital accounts

13. Partnership
• Features of a partnership – Co-ownership of property

14. Partnership

15. Partnership