Meaning, definition and features of partnership
When two or more persons join together to form a business to share the profit or loss arising therefrom in an agreed ratio, the relationship among them is called partnership. The business may be carried on by all or any of them acting for all.
According to Section 4 of the Indian Partnership Act, 1932, partnership is defined as, “the relation between persons who have agreed to share the profits of a business carried on by all or any of them acting for all”.
Following are the essential features of partnership:
· Partnership is an association of two or more persons. The maximum number of partners is limited to 50.
· There should be an agreement among the persons to share the profit or loss of the business. The agreement may be oral or written or implied.
· The agreement must be to carry on a business and to share the profits of the business.
· The business may be carried on by all the partners or any of them acting for all.