Identify the form of a business in which members have agreed to share the profits of business carried on by all or any of them acting for all and explain any five feature of this form of organisation

cbse
formsofbusiness

#1

The form of business organisation is partnership.Following are the features of a partnership firms :
(i)Formation : The partnership form of organisation is governed by the Indian Partnership Act 1932. It comes into existence through a legal agreement stating the terms and conditions of forming partnership.
(ii)Liability : The partner of a firm have unlimited liability. They are jointly and individually liable for repayment of debts personal assets may be used for repaying debts in case the business assets are insufficient.
(iii)Risk bearing: The partners bears the risks of losses in the agreed ratio as a team. However, they also share profit as a reward for bearing risk as per the agreement.
(iv)Decision making and control: The partners share amongst themselves the reponsibility of decision making and control of day-to-day activities through their joint efforts.
(v)Membership : The minimum number of members needed to start a partnership firm is two, while the maximum number, in case of banking industry is ten and in case of other business is twenty.