Page 3 - Lesson Note 5
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Particular Partnership: This type of partnership is formed for a specified period to accomplish a
               particular     project. So when this project is over, the partnership comes to end.  E.g.
               construction of a building.B. Classification on the basis of Liability

               General partnership: This liability of partners is limited and   joint. Registration of firm   is
               optional. The partners have the right to participate in management of the firm and                       their
               acts are binding oneach other.

               Limited Partnership: The     liability of at least one partner is unlimited whereas the other
               partners may have limited. The partners with limited liability are called a special partners or limited
               partners. Registration of firm is compulsory under the Limited Liability Partnership Act, 2008.

               PARTNERSHIP  DEEDhttps://www.youtube.com/watch?v=XyQFhMO2oU4


               Thewritten agreement on a stamped paper which specifies the terms and conditions of partnership
               are called the partnership deed.

                     It  generally  includes  the following  aspects –
                       • Name of the firm • Location/Address of the firm • Duration of business. • Investment
                       made by each partner• Profit  sharing ratio of the partners • Terms    relating to salaries,
                       drawing, interest on capital   and interest on drawing of partners• Duties &obligations of
                       partners.               • Terms governing admission, retirement & expulsion of a partner,
                       preparation on of     accounts & their auditing. • Method of solving  dispute


               REGISTRATION OF PARTNERSHIP

               Registration is not compulsory it is optional. But it is always beneficial to  get the firm registered. The
               consequences  of non-registration of a  firm are as follows.

               • A partner of an unregistered   firm cannot file suit against the firm or the partner.

               • The firm cannot file a suit against third party.

               • The firm cannot file a case against its partner.


               Differences  between  Partnership and sole proprietary business:

                  BASIS        PARTNERSHIP BUSINESS                 SOLE PROPRIERARY BUSINESS
                  Legal Act    Indian partnership act,1932          No separate Legal Act

                  Number of    Minimum 2 and Maximum 50             Only a single  person
                  members
                  Formation    Through mutual agreement among       No question of agreement
                               partners
                  Secrecy  of   Low, as information is shared among   High, as there is no information sharing
                  information  partners.
                  Decision-    Joint among partners                 Individual by the sole proprietor
                  making
                  Survival     High                                 Low
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