The disadvantages inherent in the sole proprietorship are, to some extent, overcome by the acquisition of partners. A partnership can be defined as “an association of two or more persons to carry on as co-owners of a business for profit.” A partnership can be based on a written contract or a voluntary and legal agreement. Without a contract, there cannot be any partnership.
Under the Uniform Partnership Act (UPA) a general partnership is an association of two or more persons to carry on as co-owners of a business with a view to earning profit.
Definition of the partnership business
According to Kent, “partnership is a contract of two or more competent persons to place their money, effort, labor and skill or some or all of them in lawful commerce or business and to divide the profit and bear the loss in certain proportions.”
According to Parson, “Partnership is a voluntary undertaking by two or more persons who want to combine their capital and labors and skill for the purpose of conducting a business for earning profit.”
British Partnership Act, 1890 defines it as; “Partnership is the relation which subsists between persons carrying on a business in common with a view to profit.”
According to the “Indian Partnership Act of 1932, “Partnership is the relationship between persons who have agreed to share profits of a business carried on by all or any of them.”
Thus, a partnership is an association two or more persons who have joined together to share the profits of a business carried on by all or any of them actings for all.
On an agreed basis, partners contribute to capital and share the responsibility of running the business. The terms and conditions of a partnership are usually mentioned in the Partnership Deed (or Articles of Partnership).
Other Content of Partnership Business:
- Elements of Partnership Business
- Different Types of Partnership Business
- Features / Characteristics of Partnership Business
- Importance of Partnership Agreement
- Contents of Partnership Agreement
- Advantages and Disadvantages of Partnership Business
- Different Kinds of Partners
- Registration of Partnership Business
- Consequences / Effects of Partnership Registration
- Dissolution of Partnership Business