Partnership Registration in India
A partnership is an arrangement in which two or more individuals share the profits and liabilities of a business venture. Various arrangements are possible: all partners might share liabilities and profits equally, or some partners may have limited liability. Not every partner is necessarily involved in the management and day-to- day operations of the venture. In some jurisdictions, partnerships enjoy favorable tax treatment relative to corporations."Partnership is the relation between persons who have agreed to share the profit of business carried on by all or any one of them acting for all." According to partnership act 1932, sec(4).
A partnership agreement is a contract between two or more business partners that is used to establish the responsibilities, and profit and loss distribution of each partner, as well as other rules about the general partnership. There must be at least two or more persons to form a partnership firm. As per Indian partnership Act, the minimum number of person required is to buy it does not prescribe the maximum limit for the purpose. There should be a contractual relationship between the persons forming partnership. Persons competent to contract can be partners. They have to mutually agree and jointly decide to go for any business activity as per agreed terms and conditions. This may be either written or oral form among the partners. Like sole proprietorship, every partner has an unlimited liability in respect of debts of the firm. If the property or the assets of the firm are insufficient to meet the claims of the creditors, the private property of the partners can be attached to meet the claims of the creditors.