Meaning of partnership firm

 




Partnership firm means it is one types of business which is done by two or more than two partners. For achieving same goals two or more than two partners are organized and done activities by division of right and responsibilities are Called partnership firm. In this firm all partner's right and responsibilities are written in partnership deed.

In this firm the capital is higher than sole proprietorship management is also better and can expanse the market also.

 

Features

a. More than one owner: In this business firm there are minimum two  or more than two owners.

b Based on agreement - In this Business there is agreement between members and according to agreement they do the firm's activities.

c. No separate existence: In this business there no separate existence between owner and firm.

d. Unlimited liabilities: In this firm, the liabilities of owners are unlimited. If the firm cannot pay the liabilities then, liabilities are paid from owner's private assets.

Based on utmost good faith:  The partners should believe each other.

 

Advantages

Easy to establish.

More capital is invested than sole proprietorship.

In this firm there is more than one owner to manage the firm. Therefore, the management can be effective.

From the support of partners size of firm can be changed.

Decision can make in opportunity time.

 

Disadvantages

 

Conflict can be between partners.

Unlimited liabilities.

Nontransferable ownership easily.

Un useful for huge capital Business.

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