Partnership registration is a kind of firm in which more than two or just two individuals operate a business by setting terms and objectives that may or may not be registered in the partnership deed. This type of business means that every party is ready to share the liabilities as well as assets of that firm in a predetermined ration.
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Partnership firm comes into existence based on an agreement between two or more partners agree to undertake the business. The terms and conditions that govern such a partnership are outlined in a document known as the Partnership Deed.
The Partnership form of business activity can be formed only on the basis of the existence of business activity. The business can be anything and include any trade, industry or profession.
Partners are entitled to share the profits as well as bear the losses if any in the course of business.
All partners or anyone partner acting on behalf of others can undertake partnership business. This means each partner is a principal in himself who can act in his own right. Further, he can also act on behalf of other partners by acting as their agent.
Each Partner is personally liable for all losses arising in the course of business. That is to say, their personal assets can be used to pay off the outstanding debts of the partnership firm.
Each partner is entitled to participate in the day to day operations of the business. However, it is not mandatory for each partner to participate in the day-to-day operations of the business. But, partners running the business need to take consent of other partners for making the requisite decisions.
A partner cannot transfer his share to any other person. He may, however, do so on the consent of other partners.
It is not mandatory to register the partnership form of entity. However, the partners can choose to register the firm with the Registrar of Firms.
The partnership Firm may continue as long as the partners wish to do so. However, as per law, the partnership can come to an end if any of the partners dies, retires or becomes insolvent. But, the remaining partners can continue doing business under the same name after sorting out the due share of the outgoing partner.
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