Partnership Firms : The Indian Partnership Act, 1932

Partnership implies contractual co-ownership oof business. It is a relationship between two or more persons who have agreed to share profits of a business carried on by all or anyone of them acting for all. The contract or agreement an agreement signed is enforceable by law called deed is the essence of partnership may be verbal or written. 

Features of Partnership- 
1. Agreement: 
There must be an agreement to form a partnership. Any such agreement may be express or implied. 

2. Business
There must exist a business to form a partnership firm. Term business shall include every trade, occupation and profession.

3. Two or more persons:
There must be at least two persons to form a partnership and all such persons must be competent to contract. The maximum limit of number of partners is 50 and minimum is 2 in any association or partnership firm.

4. Profit Sharing:
The sharing of profits is an essential feature of partnership. Partners must agree to share the profits in any manner they choose. But an agreement to share losses is not an essential element. 

5. Mutual Agency:
It states that one for each other and for all enures that all the partners work in the common interest and in the interest of the firm.

Types of Partnership-
1. What is Partnership at will:
A situation where no provision is contained in partnership agreement regarding duration of the partnership, the partnership is called Partnership at will.
This type of partnership can be dissolved at any time by any partner, just by providing a notice of his intention for such dissolution. 

2. Particular Partnership:
A situation where a partnership is formed for a particular object or for a particular duration, the partnership is called a Particular Partnership. Such Partnership comes to an end on the completion of the object or on the expiry of the duration for which it was formed.

Partnership Deed: 
It means a document which contains the term of a partnership as agreed among the partners. It shall be duly signed by all the partners. The deed is required to be duly stamped as per the provisions of the Indian Stamp Act, 1889.
The deed may contain the following:
1. Name of the partnership firm
2. Name of all the partners
3. Nature and place of the firm
4. Date of commencement of Partnership
5. Duration of partnership firm
6. Capital contribution of each partner
7. Profit sharing ratio of the partners
8. Admission and retirement of a partner
9. Rates of interest on capital, drawings  and loans.
10. Provisions for settlement of accounts in the case of dissolution of the firm.
11. Provisions for the salaries or commissions payable to the Partners if any.
12. Provisions for expulsion of a Partner in case of gross breach of duty or fraud. 

To know about different types of partners in a partnership firm please click the link below

In this article we discussed about the partnership firm of the India Partnership act, 1932 and its features and elements in brief form. 
For more related topic please visit our blog EDURYNUS and also do give a look on our previous articles. 

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