A. MEANING OF PARTNERSHIP FIRM
Sole trading concern has limited capital, limited managerial skill, and cannot carry on business on a large scale. So persons generally combine to have enough resources and skill for doing business on a bigger scale. When two of more persons agree to carry on business for their mutual advantage such a business is termed as ' Partnership'. A partnership firm consists of two or more persons who have joined capital and or service to carry on a lawful business with a view to gain profit.
According to Dr.J.A.Shubin :" Two or more individuals may form a partnership by making a written or oral agreement that they will jointly assume full responsibility for the conduct of a business". In other words of Prof. Haney : "Partnership is the relation between persons competent to make contract who agree to carry on a lawful business in common with a view of private gain".
In Nepal formation and management of partnership is governed by the provisions of “Partnership Act, 2020”. Clause 3 of Partnership Act defines partnership as : “Partnership means any business registered in the books of Nepal Government where some persons keeping one name sharing the profit with the agreement to participate all partners for each partner or a partner for all partners in the business”.
In conclusion, we can define partnership firm as an associate of persons who have come together with a view to carryon business in common with a view to make profit. This relation of partnership exists out of contract. Persons who have entered into this relationship or partnership are individually known as ‘partners’ and collectively as ‘firm’. The business is carried on in a particular name called the ‘firm’s name’.
The above definitions clearly bring out the following essential elements, which constitute a partnership firm as a form of business organization:
1. There must be at least two or more persons to form partnership.
2. They carry business with one specific name.
3. There must be agreement between persons desirous of forming partnership.
4. Profit or loss is shared according to the agreement.
5. The business must be managed by all or one or more of them acting for all.
6. The partnership firm should be registered in the books of Nepal Government.
Sole trading concern has limited capital, limited managerial skill, and cannot carry on business on a large scale. So persons generally combine to have enough resources and skill for doing business on a bigger scale. When two of more persons agree to carry on business for their mutual advantage such a business is termed as ' Partnership'. A partnership firm consists of two or more persons who have joined capital and or service to carry on a lawful business with a view to gain profit.
According to Dr.J.A.Shubin :" Two or more individuals may form a partnership by making a written or oral agreement that they will jointly assume full responsibility for the conduct of a business". In other words of Prof. Haney : "Partnership is the relation between persons competent to make contract who agree to carry on a lawful business in common with a view of private gain".
In Nepal formation and management of partnership is governed by the provisions of “Partnership Act, 2020”. Clause 3 of Partnership Act defines partnership as : “Partnership means any business registered in the books of Nepal Government where some persons keeping one name sharing the profit with the agreement to participate all partners for each partner or a partner for all partners in the business”.
In conclusion, we can define partnership firm as an associate of persons who have come together with a view to carryon business in common with a view to make profit. This relation of partnership exists out of contract. Persons who have entered into this relationship or partnership are individually known as ‘partners’ and collectively as ‘firm’. The business is carried on in a particular name called the ‘firm’s name’.
The above definitions clearly bring out the following essential elements, which constitute a partnership firm as a form of business organization:
1. There must be at least two or more persons to form partnership.
2. They carry business with one specific name.
3. There must be agreement between persons desirous of forming partnership.
4. Profit or loss is shared according to the agreement.
5. The business must be managed by all or one or more of them acting for all.
6. The partnership firm should be registered in the books of Nepal Government.
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3 comments:
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Nice Article on Partnership Firm but please explain litte more about Partnership Firm Registration
Thanks for sharing about Partnership firm registration
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