Skip to main content

Partnership Firms

According to the Partnership Act 1890, “Partnership is a voluntary association of people (from two to twenty) which is formed to carry on business with the view to make profit”. Partnerships are commonly found in farming, building and in the professions like law, accountancy etc.

v  More capital can be raised
v  Less legal formalities. It requires a contract called ‘Partnership Deed’
v  More efficient management can be formed
v  There can be limited partners

v  Ordinary partners have limited liability
v  Partnerships are usually unstable and affects continuity
v  Limited scope for expansion

Difference between Sole Traders and Partnerships
Sole Trader
Partnership Firms
v  Sole Proprietorship is a one man business
v  Profits belong to the proprietor
v  Losses can not be shared
v  Division of labour is not possible
v  It requires no agreement
v  Effective control over the business
v  Quick decisions can be taken
v  Decisions are often hasty
v  It is owned by 2-20 partners
v  Profits are shared between partners
v  Losses can be shared between partners
v  Division of labour is possible
v  It requires an agreement /deed
v  No one partner has complete control
v  It takes more time to make decisions
v  Decisions are more reliable

Popular posts from this blog

Factors of Production and their Rewards

Type Definition Reward Land Labour Capital Enterprise All natural resources The physical and mental works of people All man made tools and machines All managers and organizers Rent Salary/Wage Interest Profit/Loss

Factors Affecting Geographical Mobility of Labour

Geographical Mobility of Labour refers to the movement of workers from one place to another place.  It depends upon; ·     cost of housing ·     cost of relocation ·     availability of social amenities ·     family ties etc

Common Barriers to Occupational Mobility of Labour

Barriers to Occupational Mobility of Labour ·     Lack of natural abilities ·     Lack of qualification ·     Cost and length of training ·     Discrimination ·     Ignorance of available job opportunities Ways to increase Occupational Mobility of Labour ·     By providing training and retraining ·     By organizing job centers