Mutual Agency
The real test of ‘partnership firm’ is ‘mutual agency’, i.e. whether a partner can bind the firm by his act, i.e. whether he can act as agent of all other partners .
Minors admitted to the benefits of partnership
As per [section 30(1)], a person who is a minor according to the law to which he is subject may not be a partner in a firm, but, with the consent of all the partners for the time being, he may be admitted to the benefits of partnership.
Membership criteria
At least two members are required to start a partnership business.But the number of members should not exceed 10 in case of banking business and 20in case of other business.
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Partnership Agreement
This should be an agreement formed between the partners.This agreement can be express or implied.When partnership agreement is laid down in written it is called ‘partnership deed.’
Lawful Business
The partners should always join hands to carry on any kind oflawful business. To indulge in smuggling, black marketing, etc., cannot be called partnership business in the eye of the law.
Competence of Partners
Since individuals join hands to become the partners, it is necessary that they must be competent to enter into a partnership contract. Thus, minors, lunatics and insolvent persons are not eligible to become the partners.
Sharing of Profit
The main objective of every partnership firm is sharing of profits of the business amongst the partners in the agreed proportion. In the absence of any agreement for the profit sharing, it should be shared equally among the partners.
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Unlimited Liability
That means, if the assets of the firm are insufficient to meet the liabilities, the personal properties of the partners, if any, can also be utilised to meet the business liabilities.
Voluntary Registration
It is not compulsory that you register your partnership firm. However, if you don’t get your firm registered, you will be deprived of certain benefits which are as mentioned below
Restriction on Transfer of Interest
No partner can sell or transfer his interest to any one without the constent of other partners.
Continuity of Business
There are many ways by which partnership can come to an end like a partnership firm comes to an end with the consent of all the partners; in the event of death, lunacy or bankruptcy of all or all except one partner.
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