PARTNERSHIP

PARTNERSHIP INTRODUCTION
The need for partnership form of organisation arose from
the limitations of sole proprietorship. In sole proprietorship,
financial resources and managerial skills are limited. One man
cannot supervise personally all the business activities. Moreover,
risk - bearing capacity of an individual is also limited. It is at this
stage that a need for associating more persons arises. So more
persons are associated to form groups to carry on business.
The partnership form of organisation comes into existence
in two ways. It may come into existence either as a result of
expansion of the sole trading concern or two or more persons joining
together through an agreement to form a partnership. In otherwords,
it is an extension of sole trading concern.
History reveals that the partnership organisation was started
with the enactment of Partnership Act in 1907 in England. In India,
the Act was approved in 1932. The Act governs the formation,
management and control of various partnership firms in the country.
A number of partnership enterprises are seen in market today.
Examples of partnership firms are: running a cinema theatre, a book
shop, chit funds etc.