The first year finance students of TIPSGLOBAL attended a guest lecture on ‘THE LEGAL ASPECTS TO CONSIDER WHEN STARTING A PARTNERSHIP FIRM', by Mrs.Kalpana Rajkumar on 12th Apr,2016.
The relation between persons who have agreed to share profits of the business carried on by all or any of them acting for all is defined as a partnership.
There are different types of businesses in India, namely Public Ltd, Private Company, Sole proprietorship, etc.
The Indian partnership act of 1932 prescribes the types of partners, which are as follows:
Active Partner, Dormant Partner, Minor partners, Partner by estoppel and Partnership by holding out.
Features of the partnership include:
A Partnership firm should compulsorily have at least two persons coming together to start a business. The maximum limit of partners are Ten in case of banking companies and twenty in the case of other companies.
- The partners of the firm share profits and losses in an appropriate ratio.
- A firm is considered as a partnership firm only when there is a partnership deed agreed between the partners. Absence of a partnership deed may result in equal sharing of profits and losses, No salary is given to the partners.
Partnership firms in India are governed by the Indian Partnership Act, 1932. While it is not compulsory to register your partnership firm as there are no penalties for non-registration, it is advisable since some rights are denied to an unregistered firm.
The entire lecture was interactive making it all the more interesting