characteristics of partnership

what are the Characteristics of partnership :-

Following are the characteristics of partnership business. I am explain all the characteristics with points

Number of partners:-

The number of members in an ordinary partnership is 2 to 20 but in case of banking business the member may be between two to ten

Agreement between partners:-

Partnership is the result of an agreement between partners and agreement may be written or oral. The relation between persons is created through and agreement

Profit sharing ratio :-

The partnership is set up to earn profit. The profit and losses are shared in an agreed ratio. Where there is no agreement the profit sharing ratio is equal

Registration is optional :-

The registration of partnership firm is optional. The partnership comes into existence after and agreement. It depends upon the decision of partners to register the firm. They can get registration certificate before or after the start of business

Unlimited liability :-

The liability of partner is unlimited. The business and private property of partner all liable to pay of business losses. The private property of one partner or property of all the partner can be used to pay the third parties. The liability of partners is joint and several.

Agency relationship :-

The partnership business can be carried on by all partners or any of them can do the business for all. The partnership law is a part of agency law. Each partner act as agent of other partners.

Partnership is business :-

Partnership is a business for the sake of profit. The people join hands to do a lawful business. The business includes every trade occupation and profession.

Business management :-

All partners have right to take active part in management of business matters. The business can be carry on buy all of any of them can act as manager on behalf of other partners.

Mutual trust :-

The partners must have mutual trust and good faith. The partners mast be honest to each other. The character and activities of the partners must be fair and beyond doubt. The success of partnership depends upon mutual trust.

Implied authority :-

implied authority of a partner arises by implication of law. It is not stated in words whether written or spoken but is understood as per law any act of partner which is done to carry on the business of the kind carried on by the firm binds the firm.

No legal status :-

The partnership business and partners are considered as one status. There is no separate status for the partnership firm.in case of loss business are private property of partners is used to compensate the creditors.