Are you looking for the definition of partnership according to the class 12 Accountancy syllabus CBSE Board? I have explained all definitions of partnership given in various books such as TS Grewal and DK Goyal Books.
What is the Definition of Partnership Class 12
Here is the simplest definition of partnership according to the syllabus class 12 CBSE Board.
Partnership is defined by India Partnership Act, 1932 as follows:-
“Partnership is the relation between persons who have agreed to share the profits of a business carried on by all or any one of them acting for all”
In other words, Partnership is the Business relationship between two of more persons to share profits of the business, carried on by all or any one of them acting for all.
Who are the Partners
The persons who have entered into partnership agreement individually are called partner
For example:- A, B and C are entered into a partnership agreement to start a partnership Business. Individually A B and C are called partners.
What is a Partnership Firm?
All partners who entered into a partnership agreement to start a partnership business are called Partnership Firm.
For Example:- A, B and C are entered into a partnership agreement to start a partnership Business. Collectively A, B and C would be called a Firm.
What is a Firm Name?
The name under which a Business is Carried is called Firm Name.
For Example:- A, and and C starts a shoe business forming a partnership firm name ‘Livsstil Shoes’. The Livsstil Shoes is the Firm name.
Nature of Partnership
There are two point of view.
Business point of view:-
According to Business of point of view Partnership Firm is a separate Entity from its partners. It means, all Business transactions are recorded are recorded with business point of view.
Legal Point of view:-
With legal of point of view, Partnership Firm is not a separate legal entity from partners. In case of any fraudulent activity by firm, legal action would be taken against partners not against the firm.