3. Definition
Sec 4 of the Act defines a partnership as the relation
between persons who have agreed to share the profit of a
business carried on by all or any of them acting for all.
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4. GENERAL FEATURES
1. Number of persons:- A minimum of two Persons are requoired to form a partnership.
Theminimum number of person is 20 and in case of banking busness it is 10 .
2. Agreement / Deed :- A partnership is theresult of an agreement between two or
more persons .The agreement may be written or aral .
3. Business :- The agreement should be for carriying on some business . The business
must be profit – seeking and also lawful .
4. Sharing of profits :- The profit should be shared by the partners n an agreed ratio . It
there s no agreement , the profit should be shared equally .
5. Business carried on by all or any of them acting for all :- Each partner can participate
in the conduct of business and act for the firm . Smilarly each partner is bound by
the acts of other partners . Thus partner is both an agent and a Principal .
6. Utmost good faith :- Good faith s the essence of a partnership . Hence each partner
should be just and faithful to one another .
7. Unlimted liablty :- Liability of each partner is unlimited. It is joint and several .
8. No separate legal exstence :- It has no separate legal existence a part from the
partners .
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5. PARTNER SHIP DEED
A document contaning the teem of partnership
as agreed to by the partners is called
“ Partnershp Deed ” or “ Artcles of Partnership” .
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6. Contents of the Deed
1. Name of the Deed .
2. Names and address of all partners .
3. Nature and place of business.
4. Date of commencement of partnership .
5. Duration of partnership , if any .
6. Capital contribuition by partners .
7. The amount which can be withdrawn by each partner .
8. Rules regarding operation of bank accouts .
9. Division of profits or losses .
10. Intrest on Capital or drawings, if any .
11. Intrest on partners loan to the firm .
12. Salaries , commissions etc. if payable to any partner .
13. Detals of divison of work among the partners .
14. The ascertainment of good will on admission, retirement and death of a partner .
15. Settlement of accounts in the events of retirement or death of partners or on
dissoluton of firm .
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