An Ideal Partnership act
An ideal partnership is a word used for a successful business. It is a business where all the partners work honestly and for a common purpose. There is a perfect understanding among them and they work in harmony. The part-
ners should be able to manage all business activities effectively. There should not be scarcity of funds. All these things are possible only when the choice of partners is correct. A large number of firms have failed because of mistrust and suspicion among partners.
Merits of Partnership
The following are some of the main advantages of the business organised on the partnership firm basis:
1.Convenience in setting-Up- As compared to
the company form of business undertakings, partnership could be easily set up. It is also not essential to get the partnership firm registered, nor are the preliminary expenses to be incurred, as it is in case of joint-stock companies. In fact, the genuine and really interested independent members intending to carry on some business, are needed in partnership firm.
2.Quality of Flexibility- The partnership firm
could easily and without any observance or compliance of formalities, make any modifications or alter the provisions in the business, in view of the prevailing circumstances or conditions.
(3)Relieved from Legal problems- The auditing
of firm’s accounts; registration of firm, etc. are not required in partnership. The partners may maintain their accounts in any form, there is no restriction in this matter. Many legal formalities are there in the company organisation.
4.Capability of Seeking larger advances- As
will of partnership is much more
compared to the sole proprietorship, since the credit or goodcould also seek larger advances. Its capacity is certainly higher. Due to its unlimthe firms.
(5) Facility of Separating from Firm- If any part-
ner intends to dissociate or separate himself from the firm,he may serve a 14 days’ notice to the firm and do so, pro-lvided there is no other agreement, contrary to it, in thisnconnection.
(6)Benefit of Collective Wisdom- The members
with varying wisdom combine together in partnership firm. It helps in doing the things very efficiently. It is also one of thenadvantages of partnership.
(7) Advantage of Specialisation- In the partner-
ship organisation, every partner is a specialist in his own sphere. The work or duties are distributed among partnersnon the basis of specialisation. As conceived by James Lundy,partnership enjoys the benefits of division of labour and specialisation in comparison to the sole trading.
(8) Occupational Secrecy- In the partnership firm,
all the internal and policy matters remain confined only upto the partners. In partnership, even the publication of the accounts has not been made statutory or compulsory.
(9)Liberal Capital Resources- As compared to
a sole trader, there are more liberal capital resources in the partnership firm. In the development and expansion of the business, much help is available by the expanded and larger capital arrangements.
(10) Quick Decisions- As compared to the joint-
stock companies, the partners could take the decisions promptly in a firm. They may easily meet together for conpersonally affected in all the matters, they take the decisidering over any important matter. Since the partners are sions after a careful consideration only.