QUESTION 11. What is the meaning and definition of partnership ?
ANSWER 11. No one is perfect in this world . Hence it is almost impossible, that a person incorporates I'm himself all the qualities that are necessary to be a successful businessman . To overcome this fact and difficulty , persons possessing different skills join together and form partnerships.
Those persons who form a partnership are individually known as partners and collectively as a firm. The number of partners in a firm is limited by law and it's functions also is regulated by law . In india, partnership firm is governed by Indian Partnership Act 1932, section 4 of this Act defines partnership as :
" The relationship between persons, who have agreed to share profits of a business carried on by all or any one of them acting for all."
Thus , it can be concluded that the partnership is an association of two or more persons who have joined together to carry on legal business with profit motive, carried on by all or any one of them acting for all. In case of banking companies the minimum no. Of partners atleast two or at the most ten persons and in case of other business twenty persons is the limit to form a partnership.