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Individual Assignment
1. Characteristics of a Partnership firm
2. How a partnership contract is formed
1
Partnerships can be described as an agreement between two or more
individuals who have mutual interests and are bound together by a legal
document (usually a contract) of sorts that splits the responsibilities of
business i.e management and ownership.
The coming together of these entities is by choice/voluntary, they are one
as a business (mutual agency) but are still separate outside of the
business, this means that each partner has their own account in relation to
the business.
There are three main types of partnerships, further split into two groups
(liability or duration) as per the nature of the partnership.
Liability
Limited Partnerships. This type of binding means that all except one
partner (general partner) have limited liability. The general partner
runs the affairs of the firm.
General Partnerships. All members have unlimited liabilities and take
part in management activities.
Duration
Particular partnership. When partnerships are created for a particular
project or a specific time only. The venture performs well, it can be
continued as a general partnership. Otherwise, it can be dissolved.
2
References