Partnership Act

 The Indian Partnership Act was passed in 1932 to define and amend the law relating to partnership. Indian Partnership Act is one of very old mercantile law. Partnership is one of the special types of Contract. Initially, this was part of Indian Contract Act itself , but later converted into separate Act in 1932.

The Indian Partnership Act is complimentary to Contract Act. Basic provisions of Contract Act apply to contract of partnership also. Basic requirements of contract i.e. legally enforceable agreement,mutual consent, parties competent to contract, free consent, lawful object, consideration etc. apply to partnership contract also.

Partnership Contract is a ‘concurrent subject’ - ‘Contract, including partnership contract’ is a ‘concurrent subject, covered in Entry 7 of List III (Seventh Schedule to Constitution). Indian Partnership Act is a Central Act, but State Government can also pass legislation on this issue. Though Partnership Act is a Central Act, it is administered by State Governments, i.e. work of registration of firms and related matters is looked after by each State Government. The Act is not applicable to Jammu and
Kashmir.

Unlimited liability is major disadvantage - The major disadvantage of partnership is the unlimited liability of partners for the debts and liabilities of the firm. Any partner can bind the firm and the firm is liable for all liabilities incurred by any firm on behalf of the firm. If property of partnership firm is insufficient to meet liabilities, personal property of any partner can be attached to pay the debts of the firm.

Partnership Firm is not a legal entity -  It may be surprising but true that a Partnership Firm is not a legal entity. It has limited identity for purpose of tax law. As per section 4 of Indian

Partnership Act, 1932, 'partnership' is the relation between persons who have agreed to share the profits of a business carried on by all or any one of them acting for all. - - Under partnership law, a partnership firm is not a legal entity, but only consists of individual partners for the time being. It is not a distinct legal entity apart from the partners

 Partnership, partner, firm and firm name -  “Partnership” is the relation between persons who have agreed to share the profits of business carried on by all or any to them acting for all. - - Persons who have entered into partnership with one another are called individually “partners” and collectively “a firm”, and the name under which their business is carried on is called the “firm name”.

“Business” includes every trade, occupation and profes­sion. . Thus, a ‘partnership’ can be formed only with intention to share profits of business. People coming together for some social or philanthropic or religious purposes do not constitute ‘partnership’.

 Partnership at will  Where no provision is made by contract between the partners for the duration of their partnership, or for the determination of their partnership, the partnership is “partnership at will”. Partnership ‘at will’ means any partner can dissolve a firm by giving notice to other partners (or he may express his intention to retire from partnership) - - Partnership deed may provide about duration of partnership or how partnership will be brought to end. In absence of any such term, the partnership is ‘at will’. In case of ‘particular partnership’, the partnership comes to end when the venture for which it was formed comes to end.

Determination of rights and duties of partners by contract be­tween the partners - Subject to the provisions of this Act, the mutual rights and duties of the partners of a firm may be determined by con­tract between the partners, and such contract may be express or may be implied by a course of dealing.  Such contract may be varied by consent of all the partners, and such consent may be express or may be implied by a course of dealing. Thus, partners are free to determine the mutual rights and duties by contract. Such contract may be in writing or it may be implied by their actions.

"Every partner has right to take part in business"

Partnership Deed

“A partnership deed can be defined as a document that is prepared to explain important points so that the chances of clash amongpartners are minimized to a great extent. ”Whenever a partnership is formed, the partners are bound in two kinds of responsibilities. One is the individual responsibility of each partner and the other is the collective responsibility of all the concerned partners.

The acts of partners in normal course of business unite the firm. If the partners work with understanding and collaboration, the company is sure to function flawlessly.

If there is mistrust among them, conflicts are bound to surface every now and then. It is because business is so complex a job that various kinds of decisions are to be taken almost on a daily basis.The past experience of partnership firms show that there are disputes among partners over countless things and this results in the shutting down of the business.

 

So, a partnership deed can be defined as a document that is prepared to explain important points so that the chances of clash are minimized to a great extent. Such a document consists of all the significant clauses like name of the business, contribution of capital, allocation of profit and the like.

Partnership is a document containing all the matters according to which mutual rights, responsibilities and duties of the partners in the carrying out and administration of the matters of the firm are determined. The deed is surely to be signed by all the partners.

A partnership deed can be effected by word of mouth or can be in black and white. In some countries a written accord among partners is indispensable to bind them lawfully whereas in USA such an accord can be oral or on paper.

A written accord should be favored because then nobody can create a row as regards the contents of the deed. There may be disagreements about what was agreed upon earlier if the contents are not presented in writing. A clause mutually agreed to by the partners

should only be made a part of the partnership contract.However if the point of allocation of profit is not addressed to in a deed, each

partner is deemed to get an equal share of profits and is also to bear equal burden in case of loss.

Contents of the Partnership Deed:

*Names of the partners of the firm and their addresses

*Duration of Partnership

*Capital contribution of each Partner and aspects relevant to it like introduction of additional capital, drawings that can be made etc.

*Interests to be paid on Capital, Loans given by partners to the firm, charged on Drawings and the relevant rates of interest

*Aspects relating to salaries, commissions, etc., to be paid to partners

*The ratio in which the profits and losses are to be shared among partners

*Goodwill valuation methodology at the time of incorporating changes in the partnership.

*Rights and Duties of Partners inter se among themselves.
  

*Name of the Bank/Banks where the business banking accounts should be maintained and the person/persons who are vested with the power to operate the accounts.
    

*The person/persons responsible for accounting for the business transactions and the place where the books of accounts are to be kept generally.

"Partnership" is the relation between persons who have agreed to share the profits of a business carried on by all or any of them acting for all. 

Forms Of Business Ownership

Meaning of Business Ownership:The business organization, created for the purpose of carrying on the business is given a legal from the point of view of ownership. This legal from of business organization is called form of business ownership.

Different Forms of business Organization:

1.Sole proprietorship was the earliest form of business organization.

2.There are emerged a form of business organization called joint Hindu family firm.

3.The creation of joint stock company form of organization.

4.Government to set up state or public enterprises.

Business organization in private sector:

1.Sole proprietorships.

2.Partnership Firms.

3.Joint Hindu Family in India.

4.Joint stock company.

5.Co-operation Society.

6.Multinational co-operation.

Business organization in public sector:

1.Department Undertakings.

2.Public Corporations.

3.Government Companies.

Characters Of Business Organization:

1.Ease of formation.

2.Ease of raising capital.

3.Extent of liability.

4.Degree of direct relationship between ownership and control desired.

5.Flexibility of operation.

6.Continuity of existence.

7.Type of business.

8.Impact of tax liability.

9.Transferability of interest.

10.Maintenance of secrecy.

Different Forms Of Business Organizations:

1.Sole Trading Concerns.

2.Partnership Firms.

3.Hindu Undivided Families.

4.Joint Stock Companies.

5.Co-operative Societies.

6.Multinational Co operations.

7.Government Undertaking.

8.Joint Sector Undertaking.

Meaning of Sole trading concern:

            In the words of L.H.Haney the industrial entrepreneurship is the form of business organization on the head of which stands an individual as the one who is responsible who directs its operation who alone runs the risk of failure.

Features of Sole Trading Concern:

1.The sole trading concern is the oldest and the simplest form of business organization.

2.No legal formation are required for the formation and the closing of a sole trading concern.

3.It is owned and managed by a single person.

4.It is owned by a single owner.

5.The sole trader puts his own labor in conducting his business.

6.The sole trader assumes all the risks involved in the business.

7.A sole trading concern has no separate legal existence from that of its owner.

8.The liability of the sole trader is unlimited.

Evolution Of Business

Evolution of commerce:

1.Diversity of human wants.

2.Scarcity of natural resources.

3.Diversity of natural resources.

4.Division of labor.

Various Stages Of Evolution Of Commerce:

1.Hunting and Fishing.

2.Pastoral Stage.

3.Agricultural Stage.

4.Handicraft Stage.

(a)Absence of double coincidence of wants.

(b)Lack of common measure of value.

(c)Difficulty of sub-division.

(d)Difficulty of staring wealth.

5.Money Economy Stage.

6.Domestic Stage..

7.Town Economy Stage.

8.National Economy Stage.

9.Period of Geographical Discoveries.

10.Industrial Revolution and Transport Development.

                                            Evolution of Industry

The various stages in the evolution of modern industry can be studied under three heads, they are:

Industry in the Pre-Industry Revolution era:

1.Hunting and Fishing Stage.

2.Pastoral Stage.

3.Agricultural Stage.

4.Handicraft Stage.

5.Guild Stage.

6.Domestic System.

II Industry During The Period Of Industrial Revolution:

1.Developments of engineering.

2.Revolution in iron-making.

3.Use of Steam Power.

4.Rise of chemical industries.

5.Development of coal mining.

6.Revolution in transport.

                                      Objectives Of Business

Economic  Objectives:

1.Earning of Adequate profile.

2.Creation of Customers.

3.Optimum Resources.

4.Innovation.

Social Objectives:

1.Supply of goods which the society wants.

2.Avoidance of profiteering and anti-social practices.

3.Production according to national priorities.

4.Providing employment.

Commerce And Trade

                                           Commerce

Meaning Of Commerce:

            In the words of James Stephenson, "Commerce is the sum total of all those processes which are engaged in the removal of the hindrances of persons, place and time in the exchange of commodities.

 

Scope of Commerce:

1.Commerce is not a single activity it includes many activities, such as trade or aids to trade.

2.Goods are produce for the purpose of consumption, they have to be made available from the places of production to the places of consumption.

3.There are certain hindrances or obstacles in the distribution of goods from the producers to the consumers these hindrances are mainly of six types,

* Hindrance of person.

*Hindrance of place.

*Hindrance of risk.

*Hindrance of time.

*Hindrance of finance.

*Hindrance of information.

4.The hindrance of person is removed by exchange.

5.The hindrance of place is overcome by transport.

6.Such as roadways, railways, waterways and airways.

                                     

                                                 Trade

Meaning of trade:

            Trade or exchange refers to buying and selling goods.

Trade can classified in to two types, they are:

1.Internal Trade.

2.Foreign Trade.

                                        Internal Trade

            Internal trade refers to trade within the boundaries of a country the buyers and sellers belong to the same country. Internal trade can be divided into two types, they are:

1.Wholesale trade: Wholesale trade is the sale of one or few classes of goods in large quantities by the producers or the wholesalers to retainers.

2.Retail trade: Retail trade is the sale of variety of goods in comparatively smaller quantities by the retail traders to the ultimate consumers.

                                      Foreign Trade

             Foreign trade refers to trade between one country and another, the buyers and sellers belong to different countries. Foreign trade can be divided into three types, they are:

1.Import Trade:Import trade refers to the purchase of goods from other countries for domestic use.

2.Export Trade: Export trade refers to the sale of home goods to other countries.

3.Enterpot Trade: Enterpot trade refers to import of goods from one country for the purpose o0f export to some other country.

Characteristic of Business

                                   All of we know about the business, In the business what ever we are doing knowingly or unknowingly that is ok.  But we should have idea related to the Characteristic of Business. I have found out a few characteristics of business which are listed as below.

                                    

   Characteristics of Business

                                    

     * Economic activity.
     *Sale Exchange For Value.
     *Dealing In Goods.
     *Recurrence of dealings.
     *Profit motive.
     *Element Of Risk.
     *Capital Investment.
     *Entrepreneurship.

I hope all of you should have liked the characteristics of business. If you are having more information about it, kindly share with me or if you have liked what i have posted kindly leave your comment which can guide me in future to provide the better matter.

                                         

                                      

Meaning And Nature Of Business

                       "Nature of business is a exciting game, play it right"

     

       Business is one of the economic activities, so before we take up the discussion of business, let us have some idea about "economic activities".

                                        Meaning And Nature Of Business 

              In the words of Ur wick and hunt. Business is any enterprise which makes, distributes or provides any article or services which other members of the community need and are willing to pay for.                
                   
                            

                                                ECONOMIC ACTIVITIES

           Economic activities refer to those human activities which are undertaken with the object of satisfying material or economic needs. Buying and selling of goods bu traders and specialized personal services rendered by professional like doctors, lawyers, chartered accountants, management consultants and personal services os employees in private and government undertakings.

                                                        Types of Economic Activities:

                                                                          *Business
                                                                          *Profession
                                                                          *Employment

                                                                BUSINESS
                                                                
             Business refers to economic activities concerned with the production and sale of goods and services for the purpose of earning profit,Such as trading, transportation and banking.

                                                               PROFESSION

             Profession is an economic activities concerned with the rendering of technical, specialized and export personal services to clients in return for a reward or payment called fees.Such as services of doctors, lawyers.

                                                               EMPLOYMENT

              Employment is an economic activities or occupation in which a person known as an employee under a contract of employment or contract of services performs regularly such work as may be assigned to hime by the employer in returend for a payment called salaries or wages.