Accountancy - Basics of Partnership - Short Questions and Answers
Q1: Define partnership.
Answer: When two or more persons enter into an agreement to carry on business and share its profit and losses, it is a case of partnership. The Indian partnership Act, 1932, defines Partnership as follows:
"Partnership is the relation between persons and who have agreed to share the profits of a business
carried on by all or any of them acting for all."
Q2(CBSE 2017): Does partnership firm has a separate legal entity ? Give reason in support of your answer.
Answer: As per law the partners and partnership firm have no separate legal entities.
Q3: What do you understand by 'partners', 'firm' and 'firms' name?
Answer: The persons who have entered in to a Partnership with one another are individually called 'Partners' and collectively 'a firm' and the name under which the business is carried is called 'the firm's name'.