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Thread: Define partnership. What are the essentials of partnership

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    Q. Define partnership. What are the essentials of partnership.
    1. Introduction:
    A partnership is mean of bringing together the person who can contributes capital skill for expansion of business. This type of business is very popular in our country.
    2. Definition:
    According to Sec. 4
    “Partnership is the relation between persons who have agreed to share the profits of a business carried on by all or any one of them acting for all”.
    3. Elements of partnership:
    Following are the features of partnership.
    (i) It is the result of an agreement.
    (ii) Agreement is between two or more persons.
    (iii) It is organized to carry on some business.
    (iv) Persons should be agree to share the profit of business.
    (v) Business is to be carried on by all or any of them acting for all.
    4. Feature of partnership:
    Following are the essentials of partnership.
    (I) Agreement:
    Partnership is the result of agreement without it partnership can not be formed. It may be written or oral.
    (II) Registration:
    Registration of partnership is not necessary.
    (III) Number of patners:
    There must be two member.
    (IV) Business:
    The object of partnership is to carry on business.
    (V) Unlimited liability:
    The liability of partner is unlimited to the invested.
    (VI) Profit and loss distribution:
    Profits is distributed among the partners according to their agreement in case of loss all the partners share in it.
    Case law
    P. L. D 1971 Lah. 396
    It was held that where a partnership deed instead of fixing the shares of the partners incorporates the provisions of partnership act in the deed, the shares of the partners will be governed by he partnership act.
    (VII) Legal entity:
    Partnership has not separate entity from its member.
    (VIII) Management:
    All the partner can participate activity in the affairs of business.
    (IX) Payment of tax:
    Each partner pays tax on his share of profit individually.
    (X) Co-operation:
    The success of the business depends upon mutual trust and confidence.
    (XI) Share in capital:
    Capital of the firm is supplied by the all partners according to the agreement.
    (XII) No audit:
    In the business of partnership no audit is necessary.
    (XIII) Mutual agency:
    Business may be carried on by all or any of them acting for all. Each is a principal and an agent.
    (XIV) Transfer of interest:
    A partner cannot transfer his interest with out the consent of other partners.
    (XV) Dissolution:
    Partnership is dissolved easily. It operates the pleasure of partner.
    5. Kinds of partnership:
    Following are the kinds of partnership.
    (I) Partnership at will:
    If no provision is made in the agreement regarding the duration of the partnership it is called partner ship at will.
    (II) Particular partnership:
    Such partnership is formed to do a particular business.
    (III) Limited partnership:
    The liability of limited partner is limited to the extent of his investment in the business.
    (IV) Registered partnership:
    The registration of partnership is not compulsory when a partnership is registered. It is called registered partnership.
    (V) Un-registered partnership:
    Partnership which is not registered. It is called unregistered partnership.
    6. Conclusion:
    To conclusion it can be said that, A partnership is a form of business. It has at least two member. Who joined capital or services for prosecuting of some business.

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