A partnership is an agreement where parties, known as partners, agree to cooperate to advance their mutual interest. A partnership firm is an organization that is more than 1 person to run a business with a view to loss & earn profit. The Partnership based organizations, school governments, or combinations. Organizations may partner to increase the likelihood of each achieving their mission.
According to section 4 of the Partnership Act of 1932, “Partnership is defined as the relation between two or more persons who have agreed to share the profits of a business carried on by all or any one of them acting for all”. This definition superseded the previous definition given in section 239 of Indian Contract Act 1872 as – “Partnership is the relation which subsists between persons who have agreed to combine their property, labour, skill in some business, and to share the profits thereof between them”. The 1932 definition added the concept of mutual agency.
A Partnership Firm is a Business entity created by persons who have agreed to share profits or loss of the Business. A partnership firm is a very good choice of entity for small business enterprises where 2 person or more person decides to contributes to a business and share the profit and loss. The Partnership based organizations, school governments, or combinations. Organizations may partner to increase the likelihood of each achieving their mission.