What is a Partnership Firm

What is a Partnership Firm

We understood that a proprietary form of business is faced with many limitations. There is a limit to the amount of money that can be invested by a businessman in a business. The amount of strategic thinking that he/she can do is also limited. As such, sole proprietary businesses are usually small. Partnership form of business removes these limitations and allows the business to grow.

What is a Partnership Firm?

A partnership is an arrangement where parties, known as business partners, agree to cooperate to advance their mutual interests. The partners in a partnership may be individuals, businesses, interest-based organizations, schools, governments or combinations. Organizations may partner to increase the likelihood of each achieving their mission and to amplify their reach. A partnership may result in issuing and holding equity or maybe only governed by a contract.

The partnership is an association of two or more persons to carry on a business in the capacity of co-owners. Each such person is called a partner. All the partners share the profits and losses in proportion to their respective owners, or as agreed between them.

According to the Oxford Dictionary for the Business World. “Partner is a person who shares or takes part in the activities of another person. The partnership is an association of two or more people formed for the purpose of carrying on a business”

A Partnership Firm is a popular form of business constitution for businesses that are owned, managed and controlled by an Association of People for profit. Partnership firms are relatively easy to start is prevalent amongst small and medium-sized businesses in the unorganized sectors. With the introduction of Limited Liability Partnerships in India, Partnership Firms are fast losing their prevalence due to the added advantages offered by a Limited Liability Partnership.

There are two types of Partnership firms, registered and unregistered Partnership firm. It is not compulsory to register a Partnership firm; however, it is advisable to register a Partnership firm due to the added advantages.

Here in this article, we have understood What is Partnership firm, it will surely be useful for you to grow your business.The next step once your business is registered is to open a current account online and here you are all set to successfully manage and grow your business

 

David Lockhart

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