Essential elements of Partnership

 There are many forms of business. These forms are sole proprietorship,Partnership,cooperative society, joint Hindu family, Joint stock company, joint venture and so on. Every form has its unique feature ,function, merit, demerit, application and so on. Among all partnership is one of an important form of business that is very popular in 19th and 20th century. 

Definition-

The firm in which two or more than two persons agree to start a business and accept the result according to predefine term, conditions this type of firm is called partnership. 

According to sec 4 of the Indian partnership act 1932 :- Partnership is the relation between person who have agree to share the profit of a business carried on by all or any of them acting for all. 

Essential elements-

There are many essential elements of partnership. These elements are as below:-

1. Two person:- It is the first essential element of partnership. There are two persons essential to start a form of partnership. The maximum number is unlimited. 

2. Lawful business:- The business that may start after completing the partnership must be legal. There are many business that is illegal in many country should not start after completing the partnership. For example:- Gambling is ban in India. 

3. Profit motive:- Every business has an objective so the partnership has also an objective. These objective are to earn profit, to earn maximum profit and so on. 

4. Mutual trust:-In the form of partnership every person has two role. One  he works for himself and second he also works for other partners so there is a mutual trust among all partner to start a partnership. 

5. Association of person:- In the form of partnership there are many persons work together so it is the combination of persons who agree to start a new business. 

6. A contract:- All partners are connected and combined by an agreement so an agreement is essential for starting a partnership firm. 

7. Unlimited liability:- It is also a demerit a partnership. Partnership firm has maximum liability so if any type of occurance happens the personal asset of partnership is involved to pay debt. 

So we can say that Partnership is an important form of business. It plays an important role in the development of person, personnel, society and nation. Today it is not popular because today is the age of globalization and multinational company, large scale company perform every function of every corner of the world. 

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