Are you looking for the essential features or characteristics of partnership according to syllabus of Class 12 CBSE Board. I have summed up all in detail.
there are lot of 1 marker questions can be formed from this topic.
Essential Features of Partnership class 12 Accounts
Following are the Essential Features of Partnership. Without them Partnership is not possible.
Two or More Persons:-
There must be at least two persons to form a partnership and all such persons must be competent to contract. According to Indian Contract Act 1872, except following all persons are eligible to enter into partnership aggrement.
- Minor:- The person below 18 is not eligible to be enter into partnership agreement.
- Persons of Unsound Mind:- Person with mental instability is not eligible to be a partner.
- Persons disqualified by law:- The person who is disqualified by law can enter into partnership aggrement.
Number of Maximum Partners:-
Partnership Act does not specify the maximum number of partners. But Companies Act, 2013 (section 464) empowers the central government to prescribe maximum number of partners in a firm subject to maximum of 100 partners.
But in 2014, Central government practiced its rights and prescribed maximum number of partners in a firm to be 50 vide rule 10 of the companies (Miscellaneous) Rules, 2014.
Hence, a partnership firm can have maximum 50 partners.
The partnership comes into existence through an agreement, either written or oral, and not by the operation of law. The agreement forms the basis of the mutual rights and duties of partners. The written agreement is preferred and such agreement is called a partnership deed. If any disputes arise among partners partnership deed is furnished as evidence in court.
Existence of Business and Profit Motive:-
Partnership can be formed only to run a such Business which has profit motive. If few people join hand to run a charitable trust, it can be said a partnership firm.
The partnership firm can be formed only for lawful Business.
Sharing of Profits:-
The partnership firm so formed among partners must be to share profits and losses among partners. If a member of a partnership does not share profits of the business, he/she can not be said as partner. But it is possible is a partner does not share the losses of firm.
Business carried on by all or any of them acting for all:-
It means that each partner can participate in the conduct of business and each partner is bound by the acts of other partners in respect to the business of the firm.
Relationship of Principal and Agent:-
Each partner is an agent as well as a principal of the firm. An agent, because he can bind the other partners by his acts and a principal because he himself can be bound by the acts of the other partners.
No Separate Existence:-
A partnership firm has no separate existence from its members. It means that all agreements entered with the firm will be enforceable against each partner separately and jointly.