{"id":7435,"date":"2011-12-23T10:39:00","date_gmt":"2011-12-23T05:09:00","guid":{"rendered":"http:\/\/lex-warrier.in\/?p=372"},"modified":"2011-12-23T10:39:00","modified_gmt":"2011-12-23T05:09:00","slug":"partnership-firm","status":"publish","type":"post","link":"https:\/\/lex-warrier.in\/archives\/partnership-firm.html","title":{"rendered":"Partnership Firm"},"content":{"rendered":"

Author: V S Warrier<\/strong>
\nA partnership is the relationship between persons who have agreed to share the profits of a business carried on by all or any of them acting or all. In India it is governed by the Indian Partnership Act, 1932, which extends to the whole of India except the State of Jammu and Kashmir. It came into force on 1st October 1932.<\/p>\n

Partnership is a form of business organisation, where two or more persons join together for jointly carrying on some business.\u00a0
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\nIt is an association of persons and the agreement by which a firm purports to enter into a partnership with an individual or another firm merely makes the partners of that firm individual partner of the larger partnership. A firm\u00a0as such cannot enter into an agreement as a partner with another firm or individuals.
\nIt is an improvement over the \u201cSole \u2013trade businesses\u201d, where one single individual with his own resources, skill and effort carries on his own business. Due to the limitation of resources of only a single person being involved in the sole-trade business, a larger business requiring more investments and resources than available to a sole-trader, cannot be thought of in such a form of business organisation.
\nA partnership agreement can be entered into between persons who are competent to contract. Every person who is of the age of majority according to the law to which he is subject and who is of sound mind and is not disqualified from contracting by any law to which he is subject can enter into a partnership.\u00a0
\nTherefore, when one partnership enters into a partnership agreement with another partnership firm, the partnership is in fact between all the partners of both the firms.\u00a0
\nThe word ‘Person’ in\u00a0section 4 of the Partnership Act contemplates only natural or artificial or legal person and a firm\u00a0is not a person and as such not entitled to enter into a partnership with another firm or Hindu Undivided Family (H.U.F) or individual. In this view of the matter there can arise no question of registration of a partnership purporting to be between three parties\u2019 viz. a firm, a H.U.F. and an individual as a firm.
\nFollowing can enter into a partnership<\/p>\n