Nature and Definition of Partnership(Including Essential Conditions, Relationship with Other Business Forms, and Non-Partnership Interests)
Nature and Definition of Partnership (Including Essential Conditions, Relationship with Other Business Forms, and Non-Partnership Interests) 1. Meaning and Definition of Partnership The law relating to partnership in India is governed by the Indian Partnership Act, 1932 . Section 4 – Definition “Partnership is the relation between persons who have agreed to share the profits of a business carried on by all or any of them acting for all.” In simple words, partnership means a mutual agreement between two or more persons to carry on a lawful business and share its profits and losses together. Key Elements from the Definition Relation between persons Partnership arises only from a relationship between two or more persons (maximum 10 for banking business and 20 for others). Agreement Partnership is created by contract , not by status or law. (For example, members of a Hindu Undivided Family are not partners.) Business There must be a lawful business — partnership...