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COMMERCE
Partnership
PRESENTED BY,
HARSHITHA.S
I YEAR B.ED
The inherent disadvantage of the sole proprietorship in
financing and managing an expanding business paved the
way for partnership as a viable option. Partnership serves as
an answer to the needs of greater capital investment, varied
skills and sharing of risks.
PARTNERSHIP
The Indian Partnership Act, 1932 defines partnership as
“the relation between persons who have agreed to share
the profit of the business carried on by all or any one of
them acting for all.”
Features
▹ Indian Partnership Act, 1932.
▹ Legal agreement
▹ Unlimited liability.
▹ The partners bear the risks involved in running a business as a
team.
▹ The partners share amongst themselves the responsibility of
decision making and control of day to day activities.
▹ The minimum number of partners needed to start a partnership
firm is two.
▹ According to section 464 of the Companies Act 2013, maximum
number of partners in a partnership firm can be 100.
▹ As per Rule 10 of The Companies (miscelleneous) Rules 2014, at
present the maximum number of members can be 50.
▹ Business is carried on by all or any one of the partners acting
for all.
4
5
6
7
List of partnership
firms companies in India
▹ ROYAL DUTCH SHELL
▹ RENAULT INDIA PVT. LTD- Total and
Renault
▹ MARUTI SUZUKI INDIA
▹ MAHINDRA & MAHINDRA
▹ TOYOTA KIRLOSKAR MOTORS
8
▹ Easy Formation:
Partnership is a contractual agreement between the partners to run and
run and enterprise is desirable, but not obligatory.
▹ More Capital Available:
Increases the borrowing capacity of the firm because of more partners.
partners.
▹ Combined Talent, Judgement and Skill:
As there are more than one owners in partnership, all the partners are
partners are involved in decision making. Usually, partners are pooled from
pooled from different specialized areas to complement each other
other
▹ Diffusion of Risk:
The losses of the firm are shared by all the partners as per their agreed
their agreed profit-sharing ratios.
▹ Flexibility:
The partnership business is also flexible. The partners can easily
easily appreciate and quickly react to the changing conditions and creative
creative responses to new opportunities.
▹ Tax Advantage:
9
Merits of partnership
 Unlimited Liability
In partnership firm, the liability of partners is unlimited.
unlimited.
 Divided Authority
Disagreements between the partners over enterprise
enterprise matters have destroyed many a partnership.
partnership.
 Lack of Continuity
Death or withdrawal of one partner causes the partnership
the partnership to come to an end. So, there remains
remains uncertainty in continuity of partnership.
 Risk of Implied Authority
Each partner is an agent for the partnership business.
business. Hence, the decisions made by him bind all the
10
DE-Merits of partnership
11

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Partnership

  • 2. The inherent disadvantage of the sole proprietorship in financing and managing an expanding business paved the way for partnership as a viable option. Partnership serves as an answer to the needs of greater capital investment, varied skills and sharing of risks.
  • 3. PARTNERSHIP The Indian Partnership Act, 1932 defines partnership as “the relation between persons who have agreed to share the profit of the business carried on by all or any one of them acting for all.”
  • 4. Features ▹ Indian Partnership Act, 1932. ▹ Legal agreement ▹ Unlimited liability. ▹ The partners bear the risks involved in running a business as a team. ▹ The partners share amongst themselves the responsibility of decision making and control of day to day activities. ▹ The minimum number of partners needed to start a partnership firm is two. ▹ According to section 464 of the Companies Act 2013, maximum number of partners in a partnership firm can be 100. ▹ As per Rule 10 of The Companies (miscelleneous) Rules 2014, at present the maximum number of members can be 50. ▹ Business is carried on by all or any one of the partners acting for all. 4
  • 5. 5
  • 6. 6
  • 7. 7
  • 8. List of partnership firms companies in India ▹ ROYAL DUTCH SHELL ▹ RENAULT INDIA PVT. LTD- Total and Renault ▹ MARUTI SUZUKI INDIA ▹ MAHINDRA & MAHINDRA ▹ TOYOTA KIRLOSKAR MOTORS 8
  • 9. ▹ Easy Formation: Partnership is a contractual agreement between the partners to run and run and enterprise is desirable, but not obligatory. ▹ More Capital Available: Increases the borrowing capacity of the firm because of more partners. partners. ▹ Combined Talent, Judgement and Skill: As there are more than one owners in partnership, all the partners are partners are involved in decision making. Usually, partners are pooled from pooled from different specialized areas to complement each other other ▹ Diffusion of Risk: The losses of the firm are shared by all the partners as per their agreed their agreed profit-sharing ratios. ▹ Flexibility: The partnership business is also flexible. The partners can easily easily appreciate and quickly react to the changing conditions and creative creative responses to new opportunities. ▹ Tax Advantage: 9 Merits of partnership
  • 10.  Unlimited Liability In partnership firm, the liability of partners is unlimited. unlimited.  Divided Authority Disagreements between the partners over enterprise enterprise matters have destroyed many a partnership. partnership.  Lack of Continuity Death or withdrawal of one partner causes the partnership the partnership to come to an end. So, there remains remains uncertainty in continuity of partnership.  Risk of Implied Authority Each partner is an agent for the partnership business. business. Hence, the decisions made by him bind all the 10 DE-Merits of partnership
  • 11. 11