Question

 Define Partnership Firm and explain its features

Answer 1

A partnership firm is a form of organisation wherein two or more persons work together, pool funds and share the profits earned (or bear the losses incurred).
The following are features of a partnership firm: 
i.    Easy formation: A partnership firm requires an agreement (oral or written) among the members on the share of profits and losses. 
ii.    Unlimited liability: In a partnership, all partners have unlimited liability. That is, all partners are liable for the debts of the firm to an unlimited extent. 
iii.    Risk bearing: The risk associated with the fluctuations in the firm’s profits is borne jointly by the partners. This reduces the burden on each partner. 
iv.    Sharing of decision making and control: In a partnership firm, the decision making and control are shared by the partners.
v.    Agreement: A partnership requires an agreement (oral or written) between two or more partners.