Business Partnership Features Advantages Disadvantages Sole proprietorship suffers from limited resources, hasty decisions and temporary existence etc.
To constitute a legal partnership, there must be at least two adults. In case a minor has been admitted to the partnership as a full-fledged partner, thus making him liable for losses also, the firm cannot be registered under this Act as it shall not be considered a valid partnership.
Karta, HUF and Firm: The Karta of an HUF cannot enter into a partnership with the family in his individual capacity and a family as such can also not be a partner in a partnership.
It will also be valid where the capital investment in the partnership is only from the funds of the HUF. Such a partnership can be entered into not only for commencing a new business but also in respect of an existing joint family business.
Widow of a partner: The widow of a deceased partner Features of partnership firms entitled to share the profits of the firm even though she may have not yet become a partner.
Income of the partner of a firm does not accrue from day to day but accrues only when the accounts of the firm are made up. Separate firms having same partners: In the absence of prohibition in any law for the creation or existence of two partnership firms with the same set of partners, the assessment of such firms cannot be clubbed and one assessment cannot be made.
It is not necessary that before a partnership comes into existence each partner must contribute capital to the firm. A firm can be registered only if there is an existing partnership.
If a firm is not carrying on business or there was no intention on the part of the partners that any business should be carried on by the firm, it cannot be a partnership because partnership is the relation between persons who have agreed to share the profits of a business.
Such a firm would not be entitled to registration.
Minor and the partnership: A minor cannot be fastened with any liabilities in respect of a partnership but he may be admitted to the benefits of the partnership. For such admission, the consent of all partners is a necessary pre-condition.
There is no provision in section 30 of the Partnership Act,requiring an agreement either between the minor or between the natural guardian acting for and on behalf of a minor and other partners.
When a minor is not required by law to be admitted as a partner of a firm, the question of an agreement between him and the other partners dos not arise. A minor is incapable, under the law, of entering into a contract.
Whosoever receives benefits on behalf of a minor is bound to render an account to the minor. Failure to do so will give a valid cause of action to the minor within three years of his attaining majority to bring an action against the person who failed to render account.
As the minor is incapable of entering into a contract, the law confers only benefits on him and absolves him of liabilities. The signature of either the minor or a person acting as guardian of minor is a neutral circumstance. It neither fastens any liability nor creates any rights which are not otherwise conferred by law.
There is no requirement in law obligating the guardian of a minor to sign the partnership deed on behalf of the minor. Capital Gains and Partnership firm: Capital gain shall be considered as arising to a partner of a firm on introduction of an asset as capital contribution in the firm.
This nullifies the principles laid down by the Supreme Court in Kartikeya Sarabhal v CIT which opined that such capital contribution was not liable to capital gains tax in the hands of a partner.
Accordingly fair market value of the asset on the date it became the asset of the firm would be taken as the actual cost for allowing depreciation.A partnership firm does not enjoy a separate legal status in the eyes of law.
Like all other forms of business entities, partnership firm should perform only legal activities. Like all other forms of business entities, partnership firm should perform only legal activities.
Nov 01, · features of partnership firm (with meaning) commerce educators. the meaning of partnership firm definition of firm and its features Accounting for Partnership Firms Fundamentals. ADVERTISEMENTS: Partnership Firms: Definition, Features, Advantages and Disadvantages!
Definition: The proprietorship form of ownership suffers from certain limitations such as limited resources, limited skill and unlimited liability. Expansion in business requires more capital and managerial skills and also involves more risk.
A proprietor finds him unable to fulfill these requirements. What does partnership mean. Its definition, features. (1) No company, association or partnership consisting of more than ten persons shall be formed for the purpose of carrying on the business of banking, unless it is registered as a company under this Act, .
Partnership firm business is the most popular type of business organization in India since the early days of business because it is easy to form, has no complicated legal formalities and less compliances as compared to private limited company, limited liability partnership and one person company; but each and every business entity has the special unique features to carry out the business.
A partnership is basically a settlement between two or more groups or firms in which profit and loss are equally divided Bangladesh [ edit ] In Bangladesh, the relevant law for regulating partnership is the Partnership Act .