Partnership is an association of two or more persons to carry on as co-owners of a business for profit. In most respects a partnership is like a proprietorship except that more than one owner is involved. People form partnerships simply by a verbal agreement, or more formally, by written agreement.
Typically a partnership agreement (written or oral) sets forth such terms as initial investment, duties of each partner, division of net income (on net loss), and settlement, duties of each partner, division of net income (on net less), and settlement to be made upon death or withdrawal of a partner.
Each partner generally has unlimited personal liability for the debts of the partnership. Like a proprietorship, for accounting purposes the partnership transactions must be kept separate from the personal activities of the partners. Partnerships are often used to organize retail and service-type businesses, including professional practices (lawyers, doctors, architects, and certified public accountants).
Partnership is the association of two or more persons who operate a business as co-owners by voluntary legal agreement.
Webster Dictionary Meaning
- A division or sharing among partners; joint possession or interest.
- An alliance or association of persons for the prosecution of an undertaking or a business on joint account; a company; a firm; a house; as, to form a partnership.
- A contract between two or more competent persons for joining together their money, goods, labor, and skill, or any or all of them, under an understanding that there shall be a communion of profit between them, and for the purpose of carrying on a legal trade, business, or adventure.
- See Fellowship, n., 6.
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