Definition of a partnership – A partnership is a voluntary association of two or more persons who undertake to conduct a lawful business jointly and to share their profits and losses in accordance with the agreement, they combine their means and skills to continue the business together. The concept of partnership stems from the limitation of retail trade such as limited resources, limited life of a company, limited management activities, unlimited liability, difficulties in raising capital. This article was written by Mohit Bhardwaj. A 2nd year law student currently pursuing BBA-LL. B(Hons.) from Unitedworld School of Law, Karnavati University. In this article, the author discusses the meaning, nature and characteristics of partnerships. To justify the concept, reference is made to all laws covered by the topic with relevant illustrations and examples. A written agreement between two or more individuals who come together as partners to establish and pursue a for-profit business. Among other things, (1) the nature of the transaction, (2) the capital contributed by each partner and (3) his rights and obligations are indicated. The Partnerships Act also indicates the importance of a partner and the meaning of the partnership listed below, i.e. the person who enters into a partnership between them is individually referred to as a partner and collectively referred to as a partnership.

A partnership is a form of business in which two or more people share ownership, as well as responsibility for managing the business and the revenue or losses the business generates. There are three types of partnerships: partnerships. Limited partnership. The partnership`s transactions are recorded according to the principles of the double-entry system. What are the other characteristics of a partnership? Some of the most important features are: We will now discuss some important features of a partnership company The partnership company consists of two or more people who join forces to make a profit. The accounting of partnerships involves the creation and maintenance of the complete set of accounts of the company, in which all income, expenses, contributions of the partners, drawings, etc. are recorded. Do you also know what are the 5 characteristics of a partnership? Persons who have entered into a partnership with each other are independently referred to as « partners » and exhaustively as « companies ». The name under which the transaction is carried out is called the « company name ». A partnership does not have an independent legal entity, with the exception of its members.

Therefore, the most important features of the partnership are: Usually, the partnership certificate covers all issues concerning the relationship between the partners. However, in the absence of express agreement on certain matters, the provision of section 13(b) of the Indian Partnership Act, 1932 applies. Each company can formulate its own deed of company, which specifies in detail the business objective, the contribution of the principal amount, the ratio of participation in profits and losses, the rights, obligations and liabilities of the shareholders. * Note: Under Section 30 of the Indian Partnership Act 1932, a minor may be added as a partner, but will only be admitted to the benefits of the company. When two or more people join hands to start a business and share its profits and losses, it is called a partnership. Section 4 of the Indian Partnership Act of 1932 states that partnership is « the association between persons who have agreed to share the profits of a business carried on by all or one of them acting for all. » A company deed is a written agreement between the partners on the management of the affairs of the partnership company. In other words, the written document that contains the terms of the agreement is called a company deed. According to Section 4 of the Indian Partnership Act, « partnership is a relationship between persons who have agreed to share the profits of a business carried on by all or part of them acting on behalf of all. » Note: The above are subject to the deed of partnership.

The treatment of accounting transactions in a partnership is more or less similar to that of a sole proprietorship. However, there are a few exceptions that must be followed when preparing the financial statements of a partnership company – therefore, we will conclude that « partnership is a relationship that exists between people who have agreed to put their property, work and skills into a company and share the benefits among themselves ». The 1932 definition of partnership added the concept of mutual agency. The partners must continue the activities of the company for the greatest common benefit, be fair and loyal to all others, and give each partner, his heir or representative true reports and complete information about everything that affects the company. . (Interest on capital transferred to profits and losses For example – there are two friends and they have made an agreement to establish a legal business (legal business) for the purpose of making a profit that will be shared in accordance with the agreement. This business can be managed by one of the partners or by all partners. Partnership company: Nine characteristics of the partnership company! According to the Indian Contract Act, 1872, any person, with the exception of the following persons, has the right to enter into contracts, the journal entries transmitted through the profit and loss appropriation account are: The company deed usually contains the following details: I am very satisfied with the information entered in the business link. Thank you very much. The above concept is the concept that is explained in detail about the nature of partnership for Grade 12 students.

To learn more, stay tuned to BYJU`S. . Therefore, according to the profit and loss account, the profits are transferred to a new « Profit and Loss Account » account. The recording of interest on capital, interest on arrears, salaries to shareholders, etc. is shown in the income statement. .