What Are The Characteristics Of Partnership?

A partnership is formed and established according to the requirement of partnership act 1932. Partnership is the result of an agreement among the partners. This agreement may be in written or oral, but it must be in written form for successful operations. Registration of partnership business is not compulsory by law. It depends upon the mutual will of the partners. Owner of the partnership business are known as partners.

There are at least two partners in a partnership. If the business of ordinary nature than minimum partner is 2 and maximum are 20. While in case of banking business minimum partners are 2 and maximum number of partners is 10.

All the partners in a partnership business can take part in the management of the business. However they may elect any one of them as their representative. Profit and loss of the partnership business is distributed among the partners according to the agreement. There is more number of partners and more capital is available in the partnership business as compare to the sole proprietorship so this form of business organization is suitable for medium scale of business. This form of business organization is less flexible as compare to sole Trader ship due to more owners, more resources and difference of opinion among the partners.