Partnership is the relation between persons who have agreed to share the profits of the business carried on by all or any of them acting for all
Features Of Partnership
a) NUMBERS OF PARTNERS
Maximum of 2 members ordinary business have 20 and for bank it is 10.
Any business can be started but it should be legal one.
c) TO RUN THE BUSINESS
Can run them or can keep agent
d) Division of profit
e) Unlimited liability
f) Legal entity
g) TRANSFER OF RIGHTS
Partners cannot transfer his share without concerning the partner.
Free from restriction of audit.
h) PAYMENT OF TAX
Every partner has to pay his own tax.
i) LACK OF CONTINUITY
MERITS OF PARTNER SHIP
1. Easy formation
2. Large financial resources as compared to sole trades
3. Better management ability
4. Flexible organization can change any strategy or policy.
5. Ease of raising loan
6. Personal interest
7. Mutual consultation
9. Protection of minorities
10. Employer and employee relationship
DEMERITS OF PARTNER SHIP
1. Unlimited liabilities
2. Limited capital
3. Transfers of rights
4. Lack of confidence as no audit, people do not trust
6. Delay in decision
7. Possibility of disagreement
8. Undeserving employees, including of relations
9. Negligence: every partner runs where he gets more profits