Characteristic of Partnership

TOPIC 2: PARTNERSHIP

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1.INTODUCTION OF PARTNERSHIP

 Def: Two or more persons join together to carry on business for the purposes of making profits

 The needs for partnership

 More capital

 Variety of ability and experiences

 Management responsibility is shared

 Often members are from the same family

2.NATURE / CHARACTERISTICS OF PARTNERSHIP

 Profit making intention

 Obey Partnership Act 1980 or Limited Partnership Act 1907

 Members (min: 2, max:20)

Exceptions: bank (max:10) and other professionals partnerships

(eg: accountants& doctors: no maximum limits)

 Each partners is responsible for the liabilities of the partnership so long as he still remains as a member of partnership

 Partnership is dissolved automatically when one partner dies.

3.KINDS OF PARTNERS

1. ACTIVE (OR ORDINARY) PARTNER

This partner not only contributed capital into the business, but also takes an active part in the conduct of the business.

2. SLEEPING (OR DORMANT) PARTNER

This partner has capital in the firm, but takes no actual part in the management

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