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INDEX
1. Introduction
2. Definitions 3. Features 4. Merits 5. Demerits

6. Types of

partnership firms 7. Types of Partners 8. Formation

Introduction
Partnership is a form of business

organization. This form of business starts to overcome the problems of sole-proprietorship.

Definitions : Partnership
Partnership is the relation between

two or more persons who have agreed to share the profits of the business carried on by all or any of them acting for all.
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Definitions : Partners & firm

Persons who have agreed into

partnership with one another are called individually PARTNERS and collectively FIRM.

Features : 1.Membership
There must be minimum 2 and

maximum 20 members to form the partnership firm.

Features : 2.Agreement
There

must be an agreement between the partners to form a partnership either oral or written also known as Partnership Deed .

Sample of Partnership Deed:-

Feature : 3.Business
A partnership may undertake any

lawful business activity. The partnership can be formed only for the purpose of carrying on business which is legal.
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Feature : 4.Mutual agency

The acts of one partner are binding

on other partners. Thus, partnership business can be carried on by all or by any of them acting for all.
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Features : 5.Profit sharing

The partners of the firm share the

profits of the firm in the ratio specified in the agreement.

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Illustration :-

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Merits of Partnership
Easy to Form

Larger Financial Recourses

Risk sharing

Division of work

Motivation

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Demerits of Partnership
Unlimited Liability Nontransferab ility of shares

Conflicts
Risk of mutual agency

Uncertainty

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Types of Partnership
Partnership

At will

Fixed period

particular

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Types of Partners
Partners

Active

Dormant

Secret

Nominal

Minor

By estoppel

By holding out

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Active Partners
The active partner participates in

the management of the firm.

I do all the hard-work !

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Dormant Partners
The

partners who does not participates in the management of the firm.

zzZZzzzzzZ ZZzz

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Secret Partners
The connection and relation of the

secret partner is not known to outsiders.

Ssshh its a secret..

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Minor Partner
The partnership Act 1932 does not

permit a minor to become a partner in the partnership firm. The minor can only be admitted to the benefits of the firm.
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Nominal Partners
Nominal partners are not the real

partners of the firm. They only lend their name and reputation for the benefit of the firm.

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Registration : Procedure
A partnership firm can be registered any

time. Partners have to apply to the registrar in a prescribed form along with registration fees & the information if authenticated, a certificate of registration will be issued. It is an evidence of existence of the firm.
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Registration : Procedure
Sample of an application form.

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My Views on Partnership
I think entering into a Partnership business

is much better option than running a sole proprietorship business. Partnership Firms Final accounts are similar to Sole proprietorship firms final accounts except the profit sharing & Capital A/c.
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Thank you for your attention. Any Queries ?

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