Natasha shetty

Commerce project
Partnership

NATASHA SHETTY
ROL NUMBER 19
11-F
Natasha shetty

INDEX
SR.NO PARTICULARS PAGE NO
1 Meaning 1
2 Features 2,3
3 Suitability of 4,5,6
Partnership
4 Merits and demerits 7,8,9
5 Section 2 10,11
6 bibliography
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Meaning of partnership
A partnership is a kind of business where a formal
agreement between two or more people is made who
agree to be the co-
owners , distribute
responsibilities
for running an
organization and
share the income
or losses that the
business
generates.
In India, all the
aspects and
functions of the partnership are administered under ‘The
Indian Partnership Act or behalf of other members.
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Features
Following are the few features of a partnership:
1.Agreement between Partners: It is an association of
two or more individuals, and a partnership arises from an
agreement or a contract.
The agreement (accord)
becomes the basis of the
association between the
partners. Such an
agreement is in the
written form. An oral agreement is even-handedly
legitimate. In order to avoid controversies, it is always
good, if the partners have a copy of the written agreement.

2. Two or More Persons: In order to manifest a

partnership, there should be at least two (2) persons
possessing a common goal. To put it in other words, the
minimal number of partners in an enterprise can be two.
However, there is a constraint on their maximum number
of people.

3. Sharing of Profit: Another significant component of

the partnership is, the accord between partners has to
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share gains and losses of

a trading concern.
However, the definition
held in the Partnership
Act elucidates –
partnership as an
association between
people who have
consented to share the
gains of a business, the sharing of loss is implicit. Hence,
sharing of gains and losses is vital.

4. Business Motive: It is important for a firm to carry

some kind of business and should have a profit gaining
motive.

5. Mutual Business: The partners are the owners as well

as the agent of their firm. Any act performed by one
partner can affect other partners and the firm. It can be
concluded that this point acts as a test of partnership for
all the partners.

6. Unlimited Liability: Every partner in a partnership

has unlimited liability.
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Suitability of Partnership Form Of

Business Organization

We have already learnt that persons having different

ability, skill or expertise can join hands to form a
partnership
firm to carry on
the business.
Business
activities like
construction,
providing legal
services,
medical services etc. can be successfully run under this
form of business organisation. It is also considered
suitable where capital requirement is of a medium size.
Thus, business like a wholesale trade, professional
services, mercantile houses and small manufacturing
units can be successfully run by partnership firms

The following steps are to be taken in order to form a

partnership firm:

(a) Minimum two members are required to form a

partnership. The maximum limit is ten in banking and 20
in other businesses.
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(b) Select the like-minded persons keeping in view the

nature and objectives of the business.

(c) There must be an agreement among the partners to

carry on the business and share the profits and losses.
This agreement must preferably be in writing and duly
signed by the all the partners. The agreement, i.e., the
partnership deed must contain the following:

(i) Name of the firm

(ii) Nature of the business

(iii) Names and addresses of partners

(iv) Location of business

(v) Duration of partnership, if decided

(vi) Amount of capital to be

contributed by each partner

(vii) Profit and loss sharing ratio

(viii) Duties, powers and obligations of partners.

(ix) Salaries and

withdrawals of the partners

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(x) Preparation of accounts and their auditing. (xi)

Procedure for

dissolution of the firm etc. (xii) Procedure for

settlement of disputes

(d) The partners should get their firm registered with the
Registrar of Firms of the concerned state. Although
registration is not compulsory, but to avoid the
consequences of non- registration, it is advisable to get it
registered when it is setup or at any time during its
existence. The procedure for registration of a firm is as
follows.

(i) The firm will have to apply to the Registrar of Firms

of the concerned state in the prescribed form.

(ii) The duly filled in form must be signed by all the

partners.
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Merits of partnership firm

1. Easy to start and dissolve-A partnership firm can
be setup easily and quickly. There is not much legal
formalities and expenditures are involved in the
establishment of a partnership. Similarly, a partnership
firm can be closed down very easily and quickly.
2. Higher capital-Many partners invest capitals and
there is higher flexibility in capital because new partner
can be agreed to be associated and investing can be
increased.
3. Higher innovation-Many partners use their own
ideas and innovation capacity. So there is unlimited
managerial ability
4. Reduction of work load-Partners mustn’t work more
to earn more profit. Higher profit generation is important.
So, there is no dull and monotonous work. In case of
monotony, health problem to any partner than other
partners can help and reduce absenteeism.
5. Better decision-There is specialization in decision
taking. So there can be fewer chances of taking wrong
decisions

6. Harmonization of different ability- There are many

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partners in this firm and many partners have different

skills, knowledge and capacity.
7. Credit facility-In this liability of partners becomes
unlimited. It will help to arrange more capital. And that’s
why it has more credit. It improves more financial
function
8. Close supervision-There is effective management
and effective supervision. They look the business
themselves.
Demerits of partnership firm
1. No Business secrets-The partner can keep the secrets
to himself but these secrets can be known to
competitors or others when there is conflict among
the partners
2. Uncertain existence-Death of any partner can
sometime cause death of entire firm. Dishonesty, conflict
and lack of resource also can collapse the firm
3. No Personal contact-A partner can’t be in a position
to maintain intimate contacts with his customers and
employees. He cannot be able enter to the requirements of
each and every customer. Then there is no close personal
touch which decreases the competitive strength of the
business.
4. Unlimited liability-Proprietor is liable for all the
debts of the business. In case the assets are insufficient to
meet the debts, the personal property of the proprietor can
be attached.
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5. Delay in decisions-The partnership firm is

completely not free to take all decisions and to implement
the. The partners need to consult or seek others approval.
Delay in decisions reduces the efficiency of business.
6. Danger of conflict-Many persons are the owners of
partnership firm. There can be misunderstanding and
jealousy among them and these cause problems in
operation of business and profit making
7. Difficulty in transfer of shares-Partners cannot
transfer their share without the consent of other partners.
There may be conflict when done otherwise.
8. Limited resources-There is low investment, may be
higher than in sole trading but not sufficient for large
scale production resulting in limited areas of operation.
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Section 2
The Beauty Carousel-
The beauty carousel is a salon were we specialize in
nails, hair and skin
We also run a nail
academy and provide
upcoming nail artists
with the best of
courses from highly
experienced nail
artists. We provide
you with a range of
highly trendy haircuts and styling, makeup, hair coloring,
waxing services, spray tanning and facials. Together as a
team .We strive to achieve excellence and constantly
improve our artistry to enrich and nourish our client’s
experience. We aim to offer customized haircut and color
correction to strike the perfect balance of looks that are
enduring, yet original.
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The Logo
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Bibliography
Wikipedia
Wix.logomaker
Commerce textbook icse 10
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