What is Partnership?

What is Partnership?

We can say that partnership is an agreement between two or more persons. This agreement can be of any kind. This agreement may be for the purpose of doing business or for the purpose of buying property or for any other reason. Hence, we can say that partnership or shared partnership can be between two or more persons. For example, if a person wants to do a clothing business, then no person can do any business alone. Here we can say that it is not possible for a person to handle a business alone, so that person wants to establish a shared partnership between one or more persons to grow the business. Whether that partnership is of money or heavy running around, the partnership can be of any type. Hence, we can say that two or more persons are required to increase and grow the business. A single person cannot grow any business. Many tasks have to be done to run the business, such as advertising about the business, publicizing, etc. When any agreement is made, it is a legal contract between the partners in which If we make an agreement to run the business together and share the profit and loss among themselves, then it is called partnership business which can be possible only through partnership and the business can grow. So, in simple words, we can say that partnership is formed only when two or more people come together to run any business. There can be many ways of doing business, out of which one of the most important ways is Partnership. If you want to grow your business but cannot handle the workload alone, then partnership can be a great option. Partnership can be of many types such as

1. General Partnership

In this we can say that those partners who equally share and handle the responsibility and liability of the business together, here the people have equal rights to take any decision.

2. Limited Partnership

We can explain this type of partnership in this way that in some partnerships, the responsibilities of the individuals are limited. When a task is assigned to a person, that person only looks after that responsibility and work

He has nothing to do with anyone else's responsibility. That person only does his own work with full dedication and has full control over the running of the business. While the other partners are only investors.

3. Limited Liability Partnership

We can say that this partnership is a new form of partnership. We can say that this partnership is a partnership in which all the partners work equally and invest equally in all the businesses.

In this type of partnership, if there is any loss to the business, then there is no effect on the personal property. Limited liability is called wisdom.

Advantages of doing partnership business

There are many advantages of doing partnership business, such as:

1 Business can be started with less investment because it is easy to collect capital with the contribution of many partners.

2 If there is any loss in the business of partnership, then all the partners together bear the loss equally.

3 Another benefit of partnership is that when there are many partners, everyone has different experiences, which can be very beneficial in business.

4 In partnership, everyone has more freedom to take decisions and grow the business easily.

1. How to choose the right partner

The most important thing in partnership is that you choose a person who is interested in the business, who can bear the profit and loss in the business equally and can give his full contribution to grow the business,

this is an important thing for running any business. Therefore, we can say that any partner should be selected after proper thinking.

2. How to prepare a partnership agreement

To enter into a partnership, it is very important and necessary to first make a written partnership agreement, which will include the conditions like how many partners are there, what work will be done by which partner etc.

It will also include the condition that all the partners will bear the profit and loss equally and this partnership will be valid for the time and years it is being formed and after writing all the conditions

of this partnership, get that partnership agreement registered.

In India, it is very important to get the partnership business registered with the Registrar of Firms to give it legal recognition. Some documents are also required to grow a partnership business properly,

such as getting a PAN card number for the business and firm for which you have formed a partnership, opening a bank account for the business, getting GST and other necessary documents made and getting the firm registered, etc. are necessary.

Losses in partnership

While there are many benefits of partnership, there are also many disadvantages such as1 Not having the same ideas of all the partners and disputes arising over some work and not being able to take the right decision can also be a disadvantage of par

1 Not having the same ideas of all the partners and disputes arising over some work and not being able to take the right decision can also be a disadvantage of partnership

2 Sometimes it also happens that a partner is not able to do his work properly, then the mistake of such a partner affects and impacts all the partners:

The mistake made by one partner in a partnership affects everyone and harms everyone.