FUNDAMENTALS OF PARTNERSHIP FIRM

* IF TWO OR MORE PERSONS START A BUSINESS TO SHARE PROFIT AND LOSSES AMONG THEM ITS CALLED PARTNERSHIP, THE REASON FOR LEARNING THE PARTNERSHIP ACCOUNTING TO RESOLVE THE DISPUTES AMONG PARTNER

CHARACTERISTICS OF PARTNERSHIP:-

1) TWO OR MORE PERSONS

2) AGREEMENT

3) LEGAL BUSINESS

4) PROFIT OR LOSS SHARING

PARTNERSHIP DEED:- BEFORE STARTING ANY BUSINESS, PARTNERS MAKES SOME CONDITIONS IN WRITTEN TO AVOID ANY DISPUTES THE WRITTEN AGREEMENT/ CONDITIONS BETWEEN PARTNERS CALL PARTNERSHIP DEED.

EXP:- NAME AND ADDRESS OF PARTNERS AND FIRM, NATURE OF BUSINESS, DATE OF COMMENCEMENT OF BUSINESS, PROFIT/LOSS SHARING RATIO, INTEREST ON CAPITAL/ DRWAING, SALARY TO PARTNERS ETC.

* NOTE:- IN ABSENCE OF PARTNERSHIP DEED OR DEED IS SILENT, PROVISION OF PARTNERSHIP ACT 1932 WILL BE APPLY.

UNDER THIS RULE PARTNERS HAVE TO FOLLOW THESE CONDITIONS...

1) PROFIT OR LOSS WILL BE DIVIDED EQUALLY AMONG PARTNERS

2) INTEREST ON CAPITAL SHALL NOT BE PAID

3) INTEREST ON DRAWING WILL NOT BE ALLOWED

4) 6% INTEREST ON LOAN/ ADVANCE BY A PARTNER WILL BE ALLOW, IT IS CHARGE AGAINST PROFIT.

5) SALARY OR COMMISSION ETC IS NOT BE ALLOW

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