Features of Partnership Business
When two or more persons agreed to form a business and run by them with a view to earning a profit is called partnership business. Normally partnership is the relation between persons who are agreed to share profit that a business carried on by all or any of them acting for all. There are many features of partnership business which are as follows:
Easy formation: The formation of the partnership business is very easy. Two or more persons form a partnership business by following the mutual agreement.
A number of members: For consisting a partnership business, there must be needed an association of two or more persons. Normally in a partnership business partner must be minimum 2 and maximum 20 persons. But the maximum number of persons in case of banking business is 10.
Contractual relation: The relation of partnership arises from contract and not forms status or family relation. The deed is the fundamental basis of the partnership business. These sorts of a deed may be oral or written and registered or non-registered.
Unlimited liabilities: Partners of this business remain liable for his duties and responsibilities. Every partner is liable individually and collaborates for business debts.
Legal Entity: Partnership business is formed, guided, and maintained by Partnership Act 1932 which is the lifeblood of business. Under this act, all the partnership business conducted their activities.
Mutual trust and confidence: The successful working of the partnership depends on mutual trust and confidence of its partners. Without mutual trust and confidence, no partnership business can be a success.
Distribution of profit and loss: Profit and loss are distributed according to the condition of deed paper. But if it is not mentioned in the deed, profit and loss would be distributed equally.
Registration: The registration for partnership business is not mandatory. But if it is done then some advantages will be acquired. Because without registration of partnership deed, it will never get any legal support.
Stability: The stability of partnership business is not very stable always. Because most of the case of partners are involved in the different unexpected activities. For many reasons, a partnership business is always an uncertainty to continue.
Winding-up: If any activity is seen beyond deed done by partners that will unable to exist or any partners becomes bankruptcy or fall in death or quit from the partnership then the business is dissolute.
These are the common features of partnership business which are very familiar with partners of a partnership business. These features of partnership business are different from other forms of business. On the other hand, these features create popularity of partnership business in the world.