Partnership Firm ppt

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INDEX 1. Introduction

6. Types of

2. Definitions

partnership firms 7. Types of Partners 8. Formation

3. Features 4. Merits 5. Demerits

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Introduction Partnership is a form of business

organization. This form of business starts to overcome the problems of sole-proprietorship.

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Definitions : Partnership Partnership is the relation between

two or more persons who have agreed to share the profits of the business carried on by all or any of them acting for all. 4

Definitions : Partners & firm Persons who have agreed into

partnership with one another are called individually ‘PARTNERS’ and collectively ‘FIRM’.

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Features : 1.Membership There must be minimum 2 and

maximum 20 members to form the partnership firm.

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Features : 2.Agreement There

must be an agreement between the partners to form a partnership either oral or written also known as Partnership Deed .

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Sample of Partnership Deed:-

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Feature : 3.Business A partnership may undertake any

lawful business activity. The partnership can be formed only for the purpose of carrying on business which is legal. 9

Feature : 4.Mutual agency The acts of one partner are binding

on other partners. Thus, partnership business can be carried on by all or by any of them acting for all. 10

Features : 5.Profit sharing The partners of the firm share the

profits of the firm in the ratio specified in the agreement.

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Illustration :-

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Merits of Partnership Easy to Form

Larger Financial Recourses

Risk sharing

Division of work

Motivation

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Demerits of Partnership Unlimited Liability Nontransferab ility of shares

Conflicts

Uncertainty

Risk of mutual agency 14

Types of Partnership Partnership

At will

Fixed period

particular

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Types of Partners Partners

Active

Dormant

Secret

By estoppel

Nominal

Minor

By holding out

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Active Partners The active partner participates in

the management of the firm. I do all the hard-work !

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Dormant Partners The

partners who does not participates in the management of the firm. zzZZzzzzzZ ZZzz …

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Secret Partners The connection and relation of the

secret partner is not known to outsiders. Ssshh it’s a secret..

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Minor Partner The partnership Act 1932 does not

permit a minor to become a partner in the partnership firm. The minor can only be admitted to the benefits of the firm. 23

Nominal Partners Nominal partners are not the real

partners of the firm. They only lend their name and reputation for the benefit of the firm.

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Registration : Procedure  A partnership firm can be registered any

time.  Partners have to apply to the registrar in a prescribed form along with registration fees & the information if authenticated, a certificate of registration will be issued. It is an evidence of existence of the firm. 29

Registration : Procedure  Sample of an application form.

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My Views on Partnership  I think entering into a Partnership business

is much better option than running a sole proprietorship business.  Partnership Firm’s Final accounts are similar to Sole proprietorship firm’s final accounts except the profit sharing & Capital A/c. 32

Thank you for your attention. Any Queries ?

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