Contributed by Deepak Miglani Advocate
Partnership is the form of business organization, where two or more persons can join together or jointly carrying on some business. It is an improvement over the 'sole-trade business', where one single individual with his own resources, skill and effort carries on his own business.
In a partnership, a number of persons could pool their resources and efforts and could start a much larger business. In case of loss also, the burden gets divided amongst various partners in a partnership.
According to Section 4 of the Indian Partnership Act, " The relation of partnership arises from contract and not from status; and , particular, the members of a Hindu undivided family carrying on a family business as such, or a Burmese Buddhist husband and wife carrying on business as such, are not partners in such business."
Partnership is the result of agreement. Agreement here means a contract. It arises from an agreement between two or more people. It cannot arise from status. The presence of agreement is a must. It indicates the voluntary contractual relationship of partnership.
For any query:- deepakmiglani@hotmail.com
2 comments:
Good evening sir ,
I think it is section 5 of partnership act which defines the partnership is created by contact not by a status ��
Section 4 : Definition of partnership, partner, firm and firm name.
It's given in section 5 that partnership not created by status.
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