"Partnership Firm Accounting: A Comprehensive Guid
"Partnership Firm Accounting: A Comprehensive Guid
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Summary "Partnership Firm Accounting: A Comprehensive Guide to Profit-Sharing, Liability, and Financial Statements"
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"Partnership Firm Accounting: A Comprehensive Guid
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"Partnership Firm Accounting: A Comprehensive Guid
A partnership firm is a type of business entity where two or more persons come together to carry on a business with the aim of earning a profit. The partnership is governed by an agreement between the partners, which outlines the terms and conditions of their partnership, including the capital cont...
"Partnership Firm Accounting: A Comprehensive Guid
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Introduction to Partnership Firm: Accounting
Commerce - (Commerce)
TestPrep (AP, GATE, NET ...)
Introduction to Partnership Form
Partnership is an important form of business organization where
two or more persons enter into a contract and contribute capital
to undertake a lawful business to earn profits and share them in
an agreed proportion. It is governed by two acts, the Indian
Partnership Act 1932 and the Indian Contract Act 1872.
The History of Partnership
Sole proprietorship suffered from limited resources, hasty
decisions, and temporary existence. As a remedy, partnership
emerged as a form of business organization. Partnership is an
extension of sole proprietorship where a larger business requiring
more resources and investment can be thought of.
Definition of Partnership Form
According to section 4 of the Partnership Act 1932, partnership is
the relation between persons who have agreed to share the
profits of a business carried on by all or anyone of them acting
for all. Partnership is the relation existing between persons
competent to make a contract who agree to carry on lawful
business in common with the view to own private gain.
Essentials of Partnership
There must exist an agreement between the partners.
The motive for a partnership is to earn the profit and share it
between the partners.
The agreement must be to carry out the business jointly or by
any of them acting on behalf of all.
Types of Partners
Active Partner: A person who contributes capital and takes an
active part in the management of the form.
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