• [26] U.S. states recognize forms of limited partnership that may allow a partner who does not participate in the business venture to avoid liability for the partnership’s
    debts and obligations.

  • Limited partners may not: • Draw out or receive back any part of their contributions to the partnership during its lifetime; or • Take part in the management of the business
    or have power to bind the firm.

  • A partnership is basically a settlement between two or more groups or firms in which profit and loss are equally divided South Asia[edit] Bangladesh[edit] In Bangladesh, the
    relevant law for regulating partnership is the Partnership Act 1932.

  • [35] Europe[edit] United Kingdom limited partnership[edit] Main article: UK partnership law A limited partnership in the United Kingdom consists of: • One or more people called
    general partners, who are liable for all debts and obligations of the firm; and • One or of the firm beyond the amount contributed.

  • [23] India[edit] According to section 4 of the Partnership Act of 1932,”Partnership is defined as the relation between two or more persons who have agreed to share the profits
    of a business carried on by all or any one of them acting for all”.

  • [21] A partnership is defined as the relation between persons who have agreed to share the profits of a business carried on by all or any of them acting for all.

  • [25] United States[edit] Main article: Partnership taxation in the United States Under U.S. law a partnership is a business association of two or more individuals, through
    which partners share the profits and responsibility for the liabilities of their venture.

  • They are: • Valid Agreement between the parties; • To carry on a business – this is defined in s. 3 as “any trade, occupation or profession”; • In Common – meaning there must
    be some mutuality of rights, interests and obligations; • View to Profit – thus charitable organizations cannot be partnerships (charities are typically incorporated associations under Associations Incorporations Act 1981 (Vic)) Partners share
    profits and losses.

  • However, depending on the partnership structure and the jurisdiction in which it operates, owners of a partnership may be exposed to greater personal liability than they would
    as shareholders of a corporation.

  • The principle is simply that each partner receives a share of the partnership profits up to a certain amount, with any additional profits being distributed to the partner
    who was responsible for the “origination” of the work that generated the profits.

  • [18][19] More recently, additional forms of partnership have been recognized: • limited liability partnership (LLP): a form of partnership in which all partners may have some
    degree of limited liability.

  • [7] Partnership agreements To come into being, every partnership necessarily involves a partnership agreement, even if it has not been reduced to writing.

  • A partnership is not required to be registered, but a partnership is considered as a separate legal identity from its owners only if the partnership is registered.

  • Most U.S. states have adopted a form of the Uniform Partnership Act, which includes provisions regulating general partnerships, limited partnerships and limited liability

  • Partners who work for the partnership may receive compensation for their labor before any division of profits between partners.

  • In common law jurisdictions, a written partnership agreement is not legally required, but partners may benefit from a partnership agreement that articulates the important
    terms of their relationship.

  • [18] Forms of partnership[edit] The general partnership, in which all partners manage the business and are personally liable for its debts, developed under common law.

  • Although individuals in both categories are described as partners, equity partners and salaried partners have little in common other than joint and several liability.

  • Common elements considered by courts in determining the existence of a partnership are that two or more legal persons: • Are carrying on a business • In common • With a view
    to profit.

  • Common law At common law, members of a business partnership are personally liable for the debts and obligations of the partnership.

  • The Indian Partnerships have the following common characteristics: 1) A partnership firm is not a legal entity apart from the partners constituting it.

  • [22] The law does not require written partnership agreement between the partners to form a partnership.

  • A partnership may result in issuing and holding equity or may be only governed by a contract.

  • The limited partnership (LP), is a partnership in which general partners manage the partnership’s operations, and limited partners forego the right to manage the business
    in exchange for limited liability for the partnership debts.

  • Once an agreement is reached, the partnership is typically enforceable by civil law, especially if well documented.

  • General partners may have joint liability or joint and several liability depending upon circumstances.

  • [33] If the business entity registers with the Registrar of Companies it takes the form of a limited partnership defined in the Limited Partnerships Ordinance.

  • A partnership is not a separate legal entity and partnership income is taxed at the rate of the partner receiving the income.

  • Trust and pragmatism are also essential as it cannot be expected that everything can be written in the initial partnership agreement, therefore quality governance[13] and
    clear communication are critical success factors in the long run.

  • A partnership is an arrangement where parties, known as business partners, agree to cooperate to advance their mutual interests.

  • Since partnership is ‘agreement’ there must be minimum two partners.

  • [16] • Lockstep involves new partners joining the partnership with a certain number of “points”.

  • industrial or research project) which would be too heavy or too risky for a single entity, ii) join forces to have a stronger position on the market, iii) comply with specific
    regulation (e.g.

  • [17] Taxation Partnerships recognized by a government body may enjoy special benefits from taxation policy.

  • Partner compensation Partner compensation will often be defined by the terms of a partnership agreement.

  • However, section 464 of Companies Act 2013, and Rule 10 of Companies (Miscellaneous) Rules, 2014 prohibits partnership consisting of more than 50 for any businesses, unless
    it is registered as a company under Companies Act, 2013 or formed in pursuance of some other law.

  • Section 18 of the Partnership Act, 1932 says “Subject to the provisions of this Act, a partner is the agent of the firm for the purpose of the business of the firm”[24] 5)
    Oral or Written Agreements.

  • It has limited identity for the purpose of tax law as per section 4 of the Partnership Act of 1932.

  • Contracts of partnerships are included in the Entry no.7 of List III of The Constitution of India (the list constitutes the subjects on which both the State government and
    Central (National) Government can legislate i.e.

  • Hong Kong[edit] Main article: Partnership (Hong Kong) A partnership in Hong Kong is a business entity formed by the Hong Kong Partnerships Ordinance,[32] which defines a partnership
    as “the relation between persons carrying on a business in common with a view of profit” and is not a joint stock company or an incorporated company.

  • If property of partnership firm is insufficient to meet liabilities, personal property of any partner can be attached to pay the debts of the firm.

  • A large literature in business and management has paid attention to forming and managing partnership agreements.

  • If they do, they become liable for all the debts and obligations of the firm up to the amount drawn out or received back or incurred while taking part in the management, as
    the case may be.


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