Meaning of Partnership
Sole proprietorship has limitations like limited capital and managerial ability, and cannot easily expand.
To overcome these drawbacks, the partnership form of business came into existence.
Example: If several friends join together to start a restaurant, contribute money, and share profits and losses — that’s a partnership.
Definition: Partnership is a relationship between two or more persons who agree to run a business together with the objective of earning profit.
The individuals are called Partners, and collectively they form a Firm.
The name under which the firm operates is called the Firm Name (e.g., Sultan Chand & Co., Ram Lal & Co.).
Partnership in India is governed by the Indian Partnership Act, 1932.
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