What Is Partnership Business And What Are Its Types?
A business is an economic activity which involves the purchase and sale of commodities and which is done on a regular basis with a motive to earn profits. Now there are many forms of business, one such form is partnership business.
What is Partnership Business?
A partnership is a voluntary association of a group of people who wish to perform business operations together and share the profits so earned in a decided ratio. It is a form of business which does not require to be registered.
What are the features of a partnership business?
- It does not need to be registered.
- The partners have unlimited liability.
- The partnership deed governs the whole business.
- Partnership terminated on the lunacy, death or retirement of a partner.
- The profits and losses are shared among the partners in the profit sharing ratio.
What are the types of partnership?
Partnerships are of two types i.e. General partnership and Limited Liability Partnership.
Limited Liability Partnership is a form of partnership where the partners have limited liability and there are at least two designated partners. An LLP needs to be registered and it should have LLP as a suffix in its name.
Partnership forms of businesses are quite popular and with some resources, anyone can form a partnership association.