Partnership definition in Business online study on my study level, business practice and management online study on my study level, business study online.
The need of partnership form of organization arose from the limitations of sole-proprietorship. In sole-proprietorship, financial resources and managerial skills were limited ; one man could not supervise all the business activities personally. Moreover, risk, bearing capacity of an individual was also limited. When business activities started expanding, the need for more funds arose.
More persons were required for supervising different functions. It was at this stage that a need for associating more persons arose. So, more persons were associated to form groups to carry on business. These persons brought in to the business their financial resources and are also helpful in business administrations.
Meaning of Partnership – Partner Definition in Business
A partnership is an association of two or more persons to carry on, as co-owners, a business and to share its profits and losses. The partnership may come into existence either as as result of the expansion of the sole-trading concern or by means an agreement between two or more persons desirous of forming a partnership. When the business expands in size, the proprietor finds it difficult to manage the business and is forced to take more outsiders who will not only provide additional capital but also assist him inn managing the business on sound lines.
Sometimes, thee nature of business demands large amount of capital, effective supervision and greater specialization. It is idea form of organization for the enterprise required moderate amount of capital and diversified managerial talent. This form is not suitable for a business required big capital and expert managerial personnel.
Partnership Definition in Business
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 business.”
According to Shubin two or more persons join together to share business responsibility. The liability part is mainly given as a base of partnership.
online study Partnership definition in business
L.H. Haney, “The relationship between persons who agree to carry on a business in common with a view to private gain.”
Haney has given more emphasis on sharing of gains. The coming together of persons to share the gains of a business is called partnership.
Kimball and Kimball, “A partnership firm as it is often called, is then a group of men who have joined capital or services for a prosecution of some enterprise.”
The bringing together of financial resources and services by persons for carrying on some work has been called partnership in this definition. One person may contribute money, the other may provide service, arement to carry on an enterprise.
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 the partners may be taken for debts of partnership.”
Speiegal has given a broad-based definition of partnership. Besides relationship of two or more persons, partnership gives implied authority to partners to bind the firm for their acts. The business liabilities cannot only be recovered from business property but also from partners’ assets. This brings in the unlimited liability aspect of partnership into picture.,
Section 4 of partnership Act, 1932, “The relation between persons who have agreed to share profits of a business carried on by all or any of them acting for all..” According to partnership Act, there must be two or more persons having contractual relationship.
Partnership definition in Business
It is not necessary that the business should be managed by the partners but any one or more partners can run the business on behalf of all the persons. Any partner acting on behalf of other partners can bind the firm to third parties. So, there is an implied authority for contracting on behalf of other partners.
English Partnership Act, 1960, “Partnership is the relation which subsist between persons carrying on a business in common with a view of profits.”
Uniform Partnership Act, U.S.A. defines partnership as, “an association of two or more persons who carry on as co-owners, a business for profits.”