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Partnership

Project Report on:-

Submitted by :- Guided by:-

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INDEX1. Introduction2. Definitions3. Features4. Merits5. Demerits

6. Types of partnership firms

7. Types of Partners

8. Formation

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Introduction

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

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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’.

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Features : 1.Membership

There must be minimum 2 and maximum 20 members to form the partnership firm.

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Features : 2.Agreement

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

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Sample of Partnership Deed:-

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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

Risk sharing

Easy to

Form

Division of work

Motivation

Larger

Financial

Recourses

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Demerits of Partnership

Conflicts

Unlimited

Liability

Uncertainty

Risk of mutual agency

Non-transferability of share

s

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Types of PartnershipPartnership

At will Fixed period

particular

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Types of PartnersPartners

Active

Dormant

Secret

NominalBy

estoppe

lBy

holding out

Minor

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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.

zzZZzzzzzZZZzz …

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Secret Partners

The connection and relation of the secret partner is not known to outsiders.

Ssshh it’s 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 : ProcedureSample 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 Firm’s Final accounts are similar to Sole proprietorship firm’s final accounts except the profit sharing & Capital A/c.

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Thank you for your attention.Any Queries ?