Explain the meaning of partnership.

1.	Explain the meaning of partnership.
Answer» As per Indian Partnership Act 1932, Section-4, ‘Partnership is the relation between the persons who have agreed to share the profit of a business carried on by all or any one of them acting for all.’ As per Luise Henny, ‘two or more persons who are competent to undertake a contract to earn profit from a legal business is termed as partnership. Thus, (1) partnership is created by contract. (2) Person who are competent to undertake a contract to earn profit from a legal business is known as partnership. (3) The person who enter into such relationship are individually called ’Partners’. (4) The business run collectively in partnership by two or more persons is known as partnership firm.

Answer»

As per Indian Partnership Act 1932, Section-4, ‘Partnership is the relation between the persons who have agreed to share the profit of a business carried on by all or any one of them acting for all.’

As per Luise Henny, ‘two or more persons who are competent to undertake a contract to earn profit from a legal business is termed as partnership.

Thus,

(1) partnership is created by contract.

(2) Person who are competent to undertake a contract to earn profit from a legal business is known as partnership.

(3) The person who enter into such relationship are individually called ’Partners’.

(4) The business run collectively in partnership by two or more persons is known as partnership firm.

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