In this session, we will discuss the meaning of partnership business, and its partnership definition in business, partnership definition in economics, characteristics of partnership, types of partnership.
Meaning of partnership business | definition, types, advantages, examples
In any business or business association, there is profit or loss. To share the business profit or loss in two or more parties is called partnership. Because the term partnership word is clearly defined in any of the businesses to share their profit or loss there are two or more parties to combine their hand to earn profit.
Let’s discuss the act of Indian partnership firm of section 4 in 1932 defines partnership as “the relation between person who has agreed to share profits of a business carried on by all or any of them acting for all.” (meaning of partnership).
Let’s discuss the meaning and the definition of the partnership of the most famous writer Dr. William R. Spriegal, the Oxford Dictionary for the Business World, Kimball and Kimball, Prof. Macnaughton, Dr. John A. Shubin, Charles W. Gesternberg, L. H. Haney.
According to Dr. William R. Spriegal, “Partnership has two or more members, each of whom is responsible for the obligation of the partnership. Each of the partners may bind the others, and the assets of each of the partners may be taken for the debts of the partnership.”
The Oxford Dictionary for the Business World defines the partnership, “A partner is a person who shares or takes part in activities of another person. The partnership is an association of two or more people formed for the purpose of carrying on a business”
According to Kimball and Kimball, “A partnership or firm as it is often called, is when a group of men who have joined capital or services for the prosecution of some enterprise.”
In the words of Prof. Macnaughton, “Partnership results from the desires of business to take advantages of complementary ability and to raise more capital”
According to Dr. John A. Shubin, “Two or more individuals may form a partnership by making a written or oral agreement that they will jointly assume full responsibility for the conduct of a business.” (meaning of partnership)
In the words of Charles W. Gesternberg, “The partnership may be defined as the relation existing between persons who agree to carry on a business as co-owners for profit”.
L. H. Haney defines the definition of partnership, “Partnership is an agreement between persons having the contractual capacity to carry on a business in common with a view to private gain.”
Legal definition
The Partnership Act of America says, “The partnership is an association of two or more persons to carry on as co-owners a business for profit.”
“Partnership is an association of two or more persons who carry on as co-owners, a business for profit” – Uniform Partnership Act, U.S.A
“The relation which subsists between persons carrying on a business in common with a view to profit.” (English Partnership Act, 1890)
According to the Indian Contract Act, 1872, “Partnership is the relation which subsists between persons, who have agreed to combine their property, labor or skill in some business and share the profits thereof between them” (meaning of partnership).
In the session on the meaning of partnership, we will also discuss the types of partnerships.
The types of partnership can be dedicated to the following points.
- General partnership
- Limited partnership
General partnership: – General partnership is that type of partner which takes 50/50 participated in any of the business organization. According to a general partnership in any of the business organizations, there are two or more owners to run a business. In these types of partnerships, each and every partner represents the firm with equal rights and responsibilities. The whole of the business partners can participate in whole of the management activities like that, to take effective decision making, and have the right and responsibilities to control the business, and also participate of the business’s profits, debts, and liabilities are equally share and divide equally. (meaning of partnership)
Limited partnership: – The second one is a limited partnership. In these types of partnerships, both the general and limited partners display the most important role of the business. like those unlimited labilities have to the general partner manages the business and limited control has to the limited partnership over the business (limited to his investment).
In other words, the limited partners are those partners of the business organization which can only invest and take a profit share. Also, these types of partners haven’t any interest in participating in management or decision-making. So that they do not have the right to compensate the partnership losses from their income tax return. (meaning of partnership).
In the session on the meaning of the partnership, we will also discuss the characteristics of a partnership.
The characteristics of partnership can be dedicated to the following points.
- Mutual agency
- Membership
- Unlimited liability
- Sharing profit and loss
- Agreement
- Two or more person
- Registration
- Existence of business
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