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Question
Write short answer of the following.
Define partnership and state its important features.
Solution
Partnership is a form of organisation wherein two or more persons work together, pool funds and share the profits earned (or bear the losses incurred). The following are some of the important features of partnership:
i. Easy formation: A partnership firm requires an agreement (oral or written) among its members to share the profits and losses as per the specified ratio.
ii. Unlimited liability: All the partners have unlimited liability. In other words, if the business assets fail to meet all the business debts, personal properties of the partners can be utilised for the purpose.
iii. Risk bearing: The risk associated with the fluctuations in the firm’s profits is borne jointly by the partners. This reduces the burden on each partner.
iv. Sharing of decision making and control: In a partnership firm, the decision making and control are shared by the partners.
v. Number of members: In a partnership business, the minimum number of members is 2 and the maximum number of members is 20. However, for a banking business, the maximum number of members is 10.
vi. Continuity: According to the Partnership Act, the death, lunacy, insolvency or insanity of any of the partners ends the partnership.
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The senior most family member of a Joint· Hindu family firm.
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Group 'A'
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Group 'B'
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Features of Joint Stock Company?
Define Partnership Firm and explain its features
Distinguish between the following.
Joint Hindu Family firm and Partnership
State Whether the Following Statement Are True Or False (Give Reason).
A partnership agreement cen be verbal or written.
State Whether the Following Statement Are True Or False (Give Reason)
The liability of partners is limited.
Why is partnership considered by some to be a relatively unpopular form of business ownership?
Explain the merits of partnership.
Explain the limitations of partnership.
In which form of organisation is a trade agreement made by one owner binding on the others? Give reasons to support your answer.
The business assets of an organisation amount to Rs. 50,000 but the debts that remain unpaid are Rs. 80,000. What course of action can the creditors take if
(a) The organisation is a sole proprietorship firm
(b) The organisation is a partnership firm with Anthony and Akbar as partners. Which of the two partners can the creditors approach for repayment of debt? Explain giving reasons
Define the following business entities:
Partnership
The Partnership Act limits the maximum number of partners in a non-banking partnership firm to ______.
