Commerce

According to the Tax Foundation, there are 8% of businesses in the US based on partnerships. A partnership is a kind of business where a minimum of two people start or a single person adds another owner to an existing business for any of the partnership benefits it’s looking for.

One of the most important characteristics is the different kinds and flexible number of partners in such a business.

Types of Business Partners

Active Partner (Managing or Working Partner)

A person who takes an active part, in the affairs and management of the business is called an active partner. He contributes his shares in the capital and is also liable to pay the obligations of the firm.

Nominal Partner

He is not in reality a partner of the firm but his name is used as if he is a member of the firm. He is not entitled to the profit or loss of the business but he is liable for all the acts of the firm. The person who has good prestige and status is given, the position of nominal partner.

Sub-Partner

The person who receives a share of the profit from one of the regular partners is called the Sub-Partner. He is not liable to pay the debt of the firm. He has no rights and privileges against the firm.

Silent Partner (Silent form managing point of view)

He is the kind of partner who does not participate in the affairs of the business but is known to outsiders as a partner of the firm. He is liable to pay the debts of the firm like another partner.

Secret Partner (Secret from the public point of view)

He is active in the running life of the firm but the public does not know him as a partner of the firm. He pays his share in the capital and is liable to settle the creditors of the firm.

Sleeping Partner or Dormant Partner

It is Sleeping from both Points of View i.e., public and managing

A person who

• does not conduct the management of the firm personally
• and is not known to outsiders as a partner of the firm is called a sleeping partner. But he invests his amount in the business and is liable to clear the debts of the firm. He is also called a dormant partner.

Minor Partner

There is no restriction to join the minor in the partnership by law. Although he may become a partner with the consent of all existing partners.

In this case, he can be admitted to the profits of the firm only but not losses.

He is not personally liable for the obligations of the firm. But the minor has the right to inspect and copy the accounts of the firm. Within six months of his attaining maturity, he has to give public notice of whether he wants to remain a partner or not. After his decision, he will be deemed a full-fledged partner.

Quasi Partner

A person who has retired from the running management life of the firm but he does not withdraw his capital from the business is known as a quasi-partner.

So his capital is considered a loan and he receives interest at a rate varying with the profit. Really he is not a partner but he is a Deferred Creditor.

Senior Partner

A person who brings a large portion of capital into the business is called a senior partner. He has a prominent position in the firm due to his experience, skill, energy, age, and other abilities.

Junior Partner

He invests a minor portion of capital in the business and so he has a small share in the profits. He is junior to another partner in the firm due to his age, experience, and other factors.

Holding Out Partner (Estoppels Partner)

A person who declares by word of mouth as a partner of the firm is called a holding-out partner. In reality, he is not a regular partner so he is not entitled to receive a share of the profit. Such persons are liable to those parties who have given credit on the faith of such representation.

Salaried Partner

An individual who does not bring anything i.e. amount or goods to the firm but has the right to receive a salary or share in the profit or both are named as a salaried partner. He is known to the outside world as a partner and is liable for all the acts of the firm like other partners.

Incoming Partner

A person who is newly admitted to the firm with the consent of all the parties is called an incoming partner. He is not liable for any act of the firm done before he became a partner unless he agrees;

Retired Partner (Outgoing Partner)

A person who goes out of a firm due to a certain event or reason is known as a retired or outgoing partner. In this situation, the remaining partners continue to carry on the business. The retiring partner is liable for all the obligations and debts incurred before retirement. But he will also be liable to third parties even for a future transaction if he does not give public notice of his retirement.

Partners in Profit Only

He is an individual who gets a share of the profits only without being liable for the losses. He does not participate in the management of the business. He will be liable to outsiders for all acts of the firm.

Limited Partner

A person who has not paid any obligation more than the share he holds in the firm is called a limited partner. He can not take part in the management of the firm. This kind of partner exists in a limited partnership. But this type of organizational structure is rare in our country.

Admission of a New Partner in an Existing Partnership

• A new partner can be admitted into the partnership firm at any time with the consent of all existing partners.
• A new partner to be admitted to a firm must not. be insolvent or lunatic.
• The newly admitted partner is liable for all acts of the firm done after he becomes a partner.
• A new incoming partner will not incur any obligation of the firm before he becomes a partner unless otherwise agreed.
• Other terms and conditions will be determined under the terms of the partnership agreement.

Withdrawal or Retirement of any Partner

• Every partner has a right to retire from the partnership firm by giving notice of fourteen days to all partners in case the partnership is at will.
• If a partnership is formed for a definite period of time, a partner may retire or withdraw from the firm before the expiry of that period. But in case of loss borne by other partners due to his retirement, he will be responsible for the loss.
• A partner may withdraw his share with the consent of existing partners.
• An outgoing partner can start competing for business but he cannot use the firm’s name or trademark or other special privileges.
• A retired partner will not be liable for any act of the firm after his retirement. But the withdrawing partner will be liable to third parties for all acts of the firm until he serves public notice of his retirement as withdrawal from the firm.
• A withdrawing partner has the right to receive all his benefits i.e., share an interest, etc from other partners under the provisions of an agreement.

Difference between Co-Ownership and Partnership

Reference [1]: https://taxfoundation.org/overview-pass-through-businesses-united-states/

Lisa C. Townes

Lisa is a passionate travelers. She spends 3 months every year visiting different places worldwide. She has visited almost every famous place in the world. She herself is an affiliate blogger

The Formation of Cooperative Society is a simple matter and there is no complicated procedure for its registration. The formation of the cooperative society is governed by the provision of the cooperative society Act 1925 in our country. It can be formed with limited or unlimited liability.

To get a cooperative society registered, an application on the prescribed form must be submitted to the Registrar of the cooperative societies in which the society’s office is t be located.

8 Pre-Registration Conditions for Formation of Cooperative Society

1. There must be at least 10 members above the age of 18 years. But there is no restriction on the maximum number of members.
2. The member must be resident of the same town or village or in the same group of villages.
3. There must be an in name of the society.
4. Every society with limited liability must have the word “limited” after the name of society.
5. The application must be signed by the promoters/secretary/officers. Moreover, such an application must be accompanied by the following documents:
   1. Memorandum of the Society.
   2. Articles of the Society.
   3. Two copies of the by-laws (internal working rules) proposed to be adopted by society.

After proper verification of the application according to law, the Registrar will give his approval to the formation of the society and will record the name of the society in the register. Generally, Registrar issues a certificate of registration which is conclusive evidence that the society is duly registered.

After its registration, the cooperative society can invite new members and can conduct the particular business for which it has been organized and registered.

18 Features of Cooperative Societies

Elimination of Middlemen

The management of the consumer cooperative society directly purchases the finished goods from the manufacturer and producer. Producer Cooperative society procures the raw material from the producer. Thus they try to free themselves from the grip of the middlemen and make the goods available to consumers at lower prices.

Saving in Management Expenses 

A cooperative society enjoys some economics in the field of management due to voluntary services performed by the members themselves. Thus, it is possible to minimize the expenses of management and supervision.

Minimum Stock 

Society Purchases the same goods which are actually demanded by its members. Thus there is a need to have minimum stock at hand due to constant and regular demands.

Economy in Distribution and Production Expenditure 

Society is saved from any distribution and production expenses. It has got its regular customers, therefore society has not to face any trouble for marketing its goods. Thus it has not to incur any expenditure for publicity and advertisement, which is a big item in the budget of the capitalist producer.

Integration 

Under this type of organization, complete integration between producers, wholesalers, and retailers is always possible. This is thus a clear advantage over a capitalist economy.

Employment Opportunities 

Thousands of people are engaged in different types of cooperative small scale and cottage industries. Most of them are not familiar with writing a perfect job application, Thus it removes the problem of jobless persons in developing countries.

Equal Distribution of Wealth 

With the growth of the cooperative society, wealth has not been concentrated into a few hands. Thus this factor tends to equalize the distribution of wealth in society.

Educative and Social Value 

Spirit of sacrifice, sense of mutual help, and self-help are developed among the members. They are able to adopt the principles of honesty and unity. It thus creates the economic and social aspects of human life among the members.

Financial Services 

It renders financial services for its members for the purchase of seeds, manures, implements, and houses, etc. It thus removes the financial problems of the member of the society.

Taxes Facilities 

The government provides certain concessions to this class of organization i.e. exemption from stamp duty, super tax, income tax, and business registration fees.

Improvement of Standard of Living 

Its main aim is to bring about greater benefit for its members. It supplied daily necessities of life to its members at the lowest prices. Thus it is helpful for the improvement and progress of standard of living.

Equal Status 

It is a democratic organization where members enjoy an equal voice in the management of the cooperative business.

Extensive Market 

As the goods are supplied to its members at cheaper rates, the general public is attracted to become the shareholders of the society.

Rural Development 

Cooperative organization renders public utility services such as village communications, sanitation, water supply, drainage, education and undertakes the supply of various implements to the farmers.

Encouragement of habit of Saving 

A cooperative society supplies the goods to its members at cheaper prices. It thus creates the attraction in the general public for becoming shareholders of the society. This tendency encourages the habit of saving and investment.

Miscellaneous Advantages 

• It helps to eliminate the evils of capitalism from the society. 
• It increases the business and economic activities in the country. 
• It promotes the welfare of the community.

Seven Types of Cooperative Societies

1. Producer Cooperative Societies

These are formed to eliminate the middlemen and capitalist groups from industrial production. Its main purpose is to produce goods for the requirements of its members. Surplus productions are also supplied to outriders in the open market at profit.

All the necessary activities as production, management, and marketing are performed by the members themselves. Its members get dividends on the basis of the capital invested by them.

Objectives of Producer Cooperative Society

• To purchase the raw materials and other factors at most economical prices.
• To produce the goods at the most economical level. 
• To supervise the production most efficiently and effectively. 
• To dispose of the surplus production to non members at maximum prices.
• To eliminate the middlemen and capitalists. 
• To remove the worker’s grievances in respect of working conditions, wages etc. 
• To arrange for the democratic control of the industrial unit.

2. Consumer Cooperative Societies

Society is the voluntary association of ordinary people formed with the object of obtaining the daily requirements of the members. It directly purchases the goods at a large scale from the producer or wholesalers at wholesale price.

It thus eliminates capitalists, retailers, and other middlemen from the channel of distribution and members are in a position to make their purchase at a cheaper rate.

Anyone can become a member by purchasing one share of the society.

Sometimes goods are also supplied to non-members but they do not share in the profit of the society. Profit earned by the store is distributed among the members according to the value of the purchases conducted by the manager who is elected by the members. Generally, its two types are popular in the world.

• Retail cooperative store
• Wholesale cooperative store

Objectives of Consumer Cooperative Society

• To eliminate the retailers, capitalists and wholesalers.
• To promote the welfare of the members. 
• To supply the daily necessities of life to its members at market price. 
• To increase the purchasing power an standard of living of the members of the society. 

3. Marketing Cooperative Society

It is the voluntary association of producers formed for the object of arranging the disposal of their output. It pools together the output of the individual members and arranges to supply the product at the highest possible price.

The profit of the sale of the ~ products is distributed among the contributing producers according to their individual contribution to the pool. This kind of society is particularly useful for small producers and agriculturists. It can be formed in two organizations according to the local condition of the country i.e.,

• Single purpose society
• Multi purposes society

Objectives of Marketing Cooperative Society

• To eliminate the middlemen who are liable of the high cost of marketing.
• To pool together the output of the individual members. 
• To grade and process of the pooling products of the members.
• To dispose of the product at the maximum price.
• To adjust supply to demand. 
• To provide storage facilities to its members. 
• To procure the information relating to market for the member’s product.
• To provide the financial facilities to its members

4. Insurance Cooperative Society

This type of cooperative society is formed for the objects of providing group insurance facilities to its members. It makes the contract with the sound insurance company on collective terms and conditions and thus pays a lower premium rate to the insurance company as compared with ordinary policyholders.

2 Forms of cooperative Insurance

Mutual Office

In the Mutual office, the policyholders are the owners and the profit of the insurance company is utilized in the following ways:

• To strengthen the financial position of the company.
• To decrease true amount of premium.
• To distribute bonus to its members.

Self concern

A cooperative society is organized to provide insurance facilities like the private insurance company and issued policies to its members for a reasonable amount.

Objectives of Insurance Cooperative Society

• To provide insurance facilities to its members.
• To charge the low rate of premium. 
• To promote the welfare of the members. 
• To encourage the habit of thrift and investment.
• Housing Cooperative society

It is an association of middle and low-income groups of people. Generally, it is formed in urban areas. The main purpose of this form of society is to protect its members against exploitation by landlords. It not only grants financial assistance to its members but also achieves the economics of the purchase of building material in bulk.

In order to become a member of society, one must buy at least one share of the society. The liability of the member is limited to his capital contributed. It is also called “Building Society” and may be divided into three types i.e.

• Housing Building Society
• Land Society
• Finance Society

Objectives of Building Society

• To receive deposits from its members. 
• To make loans to its members for the construction of house at low rate of interest. 
• To render technical services for its members. 
• To purchase building materials at economical rate. 
• To perform the welfare activities as water supply, roads, sewerage, electricity etc.
• Cooperative Farming Society

This form of Society is formed with the object of obtaining the benefits of large-scale farming and maximizing agricultural products. It is basically an agricultural cooperative that is confined to agricultural countries. Its members generally relate to the former including those owning land.

The Cooperative Forming are of the following types

• Cooperative collective farming Society.
• Cooperative joint farming society. 
• Cooperative better farming society.
• Cooperative tenant farming society.

Objectives of Cooperative Forming

• To consolidate holding.
• To introduce new technique of cultivation.
• To improve the irrigating system.
• To increase the area under agricultural operations.
• To make necessary steps for the improvements of the standard of living of the farmers. 
• To increase the production per acre. 
• To provide seeds manures and implements to its members.
• To dispose of agricultural output.

7. Credit Cooperative Society

Credit cooperative society is the voluntary association of the financially weak persons organized with the object of providing short-term financial requirements to them.

This society performs an important role in the rural areas where the dishonest money lenders have been exploiting simple villagers by charging a high rate of interest.

The Funds of the Society Consist of 

• Membership fees
• Dispose of shares
• Deposits from members and non-members
• Loan from govt. and semi govt.

The liability of members is unlimited. This assists society in raising funds and ensures that every member will take a keen interest in the activities of the society.

Society prefers the poorer members in granting loans and charges a low rate of interest from them. Generally, society advances the amount for productive purposes but some loans are also given to members for unproductive purposes. Credit cooperative society may be divided into two types:

• Agricultural Credit Society
• Non-agricultural credit Society

Objectives of Credit Society

• To get rid of the pressure of money lenders. 
• To provide the financial facilities for short term to its members.
• To keep the minimum rate of interest on loan.
• To develop the habit of thrift and saving among the members.
• To encourage the habit of mutual aid.

Lisa C. Townes

Lisa is a passionate travelers. She spends 3 months every year visiting different places worldwide. She has visited almost every famous place in the world. She herself is an affiliate blogger

You write, speak, or show from your gesture and postures. You are communicating but Why do you communicate? The reasons and styles of communication may be different depending upon sender and receiver but everyone is communicating.

Even birds do by whistling and animals by roaring. According to recent researches, Plant communicates too. But here, we are not talking about who communicates to whom and how do they do this.

Communication is the process of passing information and understanding from one person to another. It is a two-way process of exchanging ideas or information between two human beings.

Communication Objectives

• To initiate some action
• To impart information (ideas, attitudes, beliefs or feelings
• To establish, acknowledge or maintain links or relations with other people

Initiating Action

The basic purpose of communication is to initiate some action. It is used to express the needs and requirements of a person. Firstly, you communicate to change the attitudes and behaviors of others. Then you persuade them to carry out the desired action.

Imparting Information

Information gathering is a constant activity of human beings. Much of the knowledge you learn comes from communicating with others. Teachers most often make a speech to impart information. Feedback from other people shows your strengths and weaknesses. You impart information through news bulletins, bank statements, gossip, business information, discussion, etc. Imparting information may have the following specific purposes:

• Creating awareness 
• Creating understanding 
• Persuading others 
• Influencing others

Establishing Relations

Establishing and maintaining relations with other people is a vital function of communication.

Aristotle says, “Man is a social animal”. Being a social animal, he cannot live alone. To fulfill his needs in life, he has to communicate with others. Similarly, you communicate with others to fulfill your needs in life. You can communicate with others in the following ways.

• You can nod or wave to show that you recognize some one you have met before.
• You can make eye contact while speaking.
• Keep in touch by telephone, letter or making a visit.
• You can use his/ her name while speaking or writing.

Communication is the act of sharing or imparting information between two persons or parties.

The word communication has been derived from the Latin word “communis” which means common. So communication means sharing of ideas in common.

Literally, communication means to inform, to tell, to show, or to spread information.

It is a two-way process in which a speaker must have a listener and a writer must have a reader to share his ideas. So communication is the process by which a message evokes a response.

Communication Defined As & By

Communication is the process of conveying messages (facts, ideas, attitudes and opinions) from one person to another so that they can be understood 

M. W. Cumming

Communication is an exchange of facts ideas, opinions, or emotions by two or more persons.

George Terry

We define communication as the process by which message affects response. 

Harold Janis

The search for all available means of persuasion 

Aristotle

The flow of material information, perceptions and understanding between various parts and members of an organization.

Fred Luthans

Communication enables organizations to function. Organizations cannot function without open and effective communication. So it can be said that communication is the lifeblood of every organization.

7 Basic Elements of Communication

Sender

The process of communication begins when the sender is struck by an idea. Firstly, let us see who is a sender? A sender is a person who sends the message. The sender may be a single person or a group. He acts as a speaker, writer, or encoder.

When a sender conceives an idea and wants to share it, he finds certain codes to express his message and creates the desired response. While preparing the message he keeps in mind the receiver’s culture, viewpoint, needs, status, mental ability, experience, and expectations.

Encoding

The second component is encoding. Encoding means converting the idea into a message by using different words, gestures, symbols, or body movements. He uses words and non-verbal signals that the receiver is familiar with so that the message will be well understood.

Message

The message is the information that the sender wants to transmit. It is the actual physical thing that the sender encodes. It creates a connection between sender and receiver. It consists of both verbal symbols and non-verbal symbols. When you write, your writing is the message. When you gesture, the movements of your arms and the expression of your face are the message.

Channel

After framing the message, the sender selects a channel or medium. The channel is the medium through which the message flows from the sender to the receiver. It may be a letter, e-mail, voice mail, fax, telephone call, conversation, or a television program. The choice of medium is influenced by the relationship between the sender and the receiver, the situation, or the urgency of the message. 

Written communication should be used when the situation is formal, official, and long-term. The oral channel is effective when immediate feedback is important. 

Receiver

When the message is transmitted, a person receives it. The receiver is the person who receives, interprets, and decodes the message. The message receiver is your reader or listener. Many of your messages may have more than one decoder. For communication to occur, your receiver must first get the message. 

Decoding

The next element is decoding. The act of understanding the message is known as decoding. It is the reverse of encoding. Your receiver must decode (absorb or understand) your message.

His decoding of the message depends upon his past experience, knowledge of the language, understanding viewpoint, and relations with the sender. Successful decoding is the correct understanding of the intent of the message as transmitted by the sender.

Feedback or Response

After decoding the message the receiver gives feedback to the sender. Feedback is the reaction of the receiver, which indicates to the sender that the message has (or has not) been successfully received, understood, and interpreted. After decoding the message, the receiver responds in the same way and signals that respond to you. This feedback helps in evaluating the success or failure of your message.

Barriers of Communication

People in the world are not exactly alike. Cultures or countries are not the same. Each person has a unique filter of the mind. These differences cause problems in conveying and receiving the meaning of the message. These problems are called barriers as they block the communication process. Following are the barriers in communication

Language/Semantic Barrier

The choice of the words or language in which a sender encodes a message affects the quality of communication. Some words have a variety of meanings. Miscommunication occurs when the sender and the receiver have different meanings of the symbols used. For example: Consider the word “value” 

• What is the value of this laptop? 
• I value our relation
• What is the value of learning technical skills? 

Value means different in different sentences. Similarly, LIFO (last in, first out) FIFO (first in, first out), people who are not accountants cannot understand such acronyms. So the problem that occurs due to the difference in meaning is called the semantic barrier. To overcome the semantic barrier we should use simple language and common symbols.

Restrictive Environment

Communication climate is influenced by an authoritarian and directive style of management. In this style, information in the form of command moves down but not up. This blocks the free and open exchange of information. To avoid climate barriers, the manager should spend more time listening than issuing orders.

Distractions

Your audience receives your message accurately if nothing physical interrupts or distorts the message. 

Physical distractions such as bad connections block effective messages. Poor lighting, uncomfortable chair, noise, passing traffic, or some other irritating conditions might distract your receiver. 

Emotional distractions also get in the way of our message. When we are upset, hostile, or fearful, we have a hard time shaping (framing) our message effectively. If our receivers are emotional, they may ignore or distort our message. 

To communicate effectively, we should try to fight physical and emotional distractions.

Closed Minds

Some people hold rigid views on certain subjects. They are not ready to accept new ideas or facts. Such close-mindedness becomes a hindrance to ineffective communication. To overcome this, we should be open-minded to the ideas of others and should attempt to understand others. 

Information Overload

Managers are surrounded by a pool of information. It is essential to control this information flow otherwise, they tend to ignore, pass over, forget, or selectively choose information. In any case, the result is lost information and ineffective communication. 

Poor Retention

Human memory cannot function beyond a limit. One cannot always retain what is being told especially if he is not interested or not attentive. This leads to communication breakdown.

Perceptual Difference

Perception means how each person looks at the world around him. People perceive reality in their own way. Even when two people have experienced the same event, their mental images of that event will not be identical (same). It is because the perception of each person is unique, the idea he wants to express differs from other people. 

Lack of Interest

One of the greatest problems of communication is the receiver’s lack of interest in your message. We should always be alert to this. Where lack of interest is obvious, we must work hard to mold our message according to the interests and needs of the receiver. 

Jumping to Conclusion

Sometimes the receivers jump to conclusions beforehand. They close their minds to get additional information. This causes problems in communication. To overcome this, we should reserve judgment until the speaker has finished. 

Sender’s Credibility

Often people react more according to their attitudes toward the source of information (sender) than to the information itself. The sender’s credibility is important in getting a favorable reaction. When the sender is incredible, he becomes a barrier in communication. To overcome this barrier, we should not judge the message by the speaker but by the argument (information)

8 Benefits of Communication

Good communication skills have always been important in the workplace. They are even more vital today. Effective communication helps in the technology and globalization of the marketplace.

Following are the benefits of effective communication.

Increase Productivity

Your ability to communicate effectively increases productivity, both your and your organization. You can get the maximum product at minimum cost and make a profit with the help of good communication.

Co-ordinate with Flow

Organizational communication establishes a pattern of formal channels to carry information. Information is passed in three ways: upward, downward and horizontal. Suggestions, complaints, and problems flow upward from employees to supervisors.

Instructions relating to the policies of conducting business are conveyed downward. At the horizontal level, information is exchanged between the employees of an organization.

Strong Business Relationships

Communication is the most vital means by which people are connected together in society. A communication skill is a key to establish strong business relationships. Without effective communication, people misunderstand each other and misinterpret information.

Build Professional Image

Effective communication makes difference to your organization in the international market. The ability to speak and write help in dealing with national and international business people. So this ability promotes the image of your organization.

Making Prompt Decisions

Communication helps to make prompt decisions. For making prompt decisions, a fact-collecting process is necessary which results from effective communication.

Building Goodwill

In this age of competition, for excellence and success, organizations need to develop goodwill and sound status. Effective communication assists organizations to maintain goodwill and credibility.

Career Building

Anyone who is able enough to communicate effectively possesses a high-value skill. So communication skills are the main requirement for getting a good job. Your job promotion and success often depend on doing well in a written and oral presentation. Your ability to communicate well is a valuable asset that leads you to success.

Job Satisfaction and Good Morale

Morale is the human element that motivates a man to work in the right spirit and is a major productivity influencing factor. Good communication removes the possibility of misunderstanding among the employers and employees. It increases the morale of the workers and each worker feels job satisfaction.

Lisa C. Townes

Lisa is a passionate travelers. She spends 3 months every year visiting different places worldwide. She has visited almost every famous place in the world. She herself is an affiliate blogger

The partnership is the most common form of business structure. In this, a minimum of two persons combine their investments, abilities, experiences, and other things to start a business. The maximum number of partnerships varies in every country. A partnership is different from a sole proprietorship but also the same to some extent.

Like Sole proprietorships, owners manage all business parts to grow and earn handsome profits. Adding different talent in the business, personal relations, experiences, and capital is a few of the most important benefits of the partnership. Although, we can not neglect the disadvantages

Top 12 Characteristics of Partnership

If you are willing to start a business in partnership, you can do it orally or written. It means you need to set some duties, roles, profit sharing decisions, management decisions, and a number of other things.

Keeping them in writing is best practice, that piece of paper is circulated among partners and also shown to the registration authority in your country. If you are going to write it, you must consider the most important contents of the partnership deed.

1. Agreement

There must be an agreement between the parties concerned. These are the most important characteristics of a partnership. Without the agreement, the partnership cannot be formed. “No agreement no partnership.” But only competent persons are entitled to make a contract. There are some set conditions in a joint business deed.

These are determined clearly before the commencement of business. But it differs from business to business. These documents may be written or oral. But it must be written so that disputes may be settled according to the provisions of the agreement.

2. Number of Partners

There should be more than one person to form a partnership. Types of business partners can be any but there is a restriction for the maximum number of partners. In the case of ordinary business, the partners must not exceed 20 and in the case of banking must not exceed 10 (before nationalization).

3. Business

The objective of partnership formation is to carry on any type of business. It may be manufacturing or merchandise type small or large scale business but it should not be an illegal business in the country concerned.

4. Profit Motive

The basic motive of the formation of a partnership is to earn a profit. The more sales you generate the more profit you make. Its partner’s duty is to distribute it according to the agreed proportion. If there is loss it will be sustained by all partners except the minor.

5. Conduct of Business

The partnership business is conducted by all the partners or any of them acting for all. But each partner has right to participate in the management by law.

6. Entity

It has no separate entity apart from its members. It is not independent of the partners. Law has not granted it any legal entity. Registration of Partnership Business to make it legal and gain more people’s trust.

7. Unlimited Liability

This is the prominent feature of partnership that the liability of each partner is not limited to the amount invested but his private property is also liable to pay the business obligations.

8. Investment

Each partner contributes his share in the capital according to the agreement. Some persons become partners without investing any capital in the business. But they devote their time, energy, and ability to their business instead of capital and receive profit.

A combination of Monetary investment and time investment can develop a strong business brand.

9. Transfer-ability of Share

There is a restriction to transfer the share from one partner to another person without the consent of existing partners. So, the investment in the partnership remains confined to a few hands.

10. Position

One partner is an agent as well as the principal to another partner. He can bind the other person by his act. In the position of an agent, he can make a valid contract with another person or parties on behalf of his concerned firm.

11. Mutual Confidence

The business of the partnership cannot be conducted successfully without the element of mutual confidence and cooperation of partners. So the members must have trust and confidence in each other. Lack of mutual confidence is a drawback of partnership.

12. Free Operation

There are no strict rules and regulations to control the partnership activities in a few countries i.e., no restriction for the audit of accounts, submission of various reports, and other copies to any government authority. So this organization may operate freely without any interference.

If, Limited Partnership

A limited partnership is that form of organization in which the liability of some persons is limited, to the amount of capital which they have contributed to the business and certain persons are liable for all the obligations of the firm. The main characteristics of a limited partnership are as under:

Limited Partner: There must be at least one limited partner.

General Partner: There must be one or more persons with unlimited liability who are liable for all debts of the firm, they are called general partners.

The number of members: There are at least two members but not more than twenty ordinary businesses and not more than ten in the banking business.

Restriction for participation: Limited partners are not allowed to participate in the management of the business. So one partner cannot bind other persons by his act.

Inspections of books: Limited partners may inspect, verify and copy all types of accounts, records, and books at any time.

Compulsory Registration: Registration is compulsory by law. With the registration of the firm, the rights and liability of partners have also been registered.

Admission of a New Partner: New partners may be admitted in this kind of partnership without the consent of the limited partner.

Separate Legislation: It is controlled under the limited partnership act 1907.

Withdrawal of Capital: Limited partner cannot withdraw his capital from the business until he remained a limited partner.

Transferability of share: The share of the limited partner can be transferred to another partner with the consent of all general partners.

Conditional participation in management: If a limited partner conducts the management of a business, he will be liable for all the obligations of the firm.

Proposals and advice: Limited partner is entitled to give his proposals and advice to active partners.

Lisa C. Townes

Lisa is a passionate travelers. She spends 3 months every year visiting different places worldwide. She has visited almost every famous place in the world. She herself is an affiliate blogger

Paper Money is defined as currency notes used as a medium of exchange and issued by the State Government. People consider currency notes as a kind of money that performs all the functions of a good medium of exchange.

Paper currency is convertible in the sense that it may convert into gold and precious metals while it may inconvertible because it is not exchangeable into coins.

Now a day’s, Like Credit Cards (a form of plastic money) paper money got more popular than other forms of money.

4 Types of Paper Money

• Representative Paper Money
• Convertible Paper Money
• Inconvertible Paper Money
• Fiat Money

Advantages and Disadvantages of Paper Money

Life and death, Plus and Minus, Right and Left, Up and Down. There are always two aspects of each thing we see in our everyday life. Similarly, Paper money has pros and cons too. It is easy to produce, and move paper money Economically and Humanly but it is also shorter in life.

Advantages of Paper Money

Paper Money is Economical

Currency Notes are economical in the sense that their face value is greater than their intrinsic value. The cost of production is less than other forms of money. Like dollar note in the USA is an example of Paper money.

Paper Money is More Elastic

Elastic means that its supply could be controlled easily. The government prints more note if there is higher demand and produces less if there is less demand. So, Government manages its production according to the requirement of the economy.

Price Stability

This kind of medium of exchange brings more price stability to an economy than in others. Currency standards manage the mechanism of monetary policy. The price stability merit of paper currency reveals equality between its demand and supply.

Paper Money Free From Cyclical Fluctuations

In the previous era, cyclical fluctuations highly influenced the money standard especially gold. Cyclical fluctuations in business cycles transform from one country to another country which simultaneously influences the economy of trading partners. But after the evolution of paper currency, this problem was removed easily. While cyclical fluctuations do not influence paper money.

Quick Usability

Currency Notes have the characteristic of quick usability because it is legal tender money. This kind of medium of exchange has the characteristic of easy acceptability because each note is issued against a certain amount of foreign security and gold reserves.

Paper Money Count Quickly

In the era of metal, people consume more time counting. But paper money facilitates people in this regard. Now people count large amounts in a few minutes and save time.

Easy to Move

People use paper currency because it is easily transferable from one place to another place. While in the case of the gold standard it was difficult to move from one place to another place. So, Paper Currency is easy to transfer.

Safely Store

In the gold standard, people faced difficulties regarding money security, and sometimes they kept their savings with other people. Large amounts increased the fair of theft but the invention of paper currency reduces all these perceptions. Paper money could be accumulating easily because people will never face the problem of debasement or theft.

Greater Acknowledge

In the previous eras of money, standard people lose confidence due to the problem of coin debasement; this mostly happened in the gold standard. But in the case of paper Money highly acknowledge due to the lack of debasement.

Demerits or Disadvantages of Paper Money

Brings More Inflation

The government prints new notes without keeping specific reserves in their valets. Excessive new note printing increases the amount of money supply which further promotes inflation in an economy. This situation decreases the value of the paper currency. While in the case of the gold standard there were fewer chances of inflation.

Unstable Exchange Rate

Another drawback of paper money is instability in the exchange rate; wide fluctuations in external price against internal price negatively influence international trade and domestic economic growth. Government adopts some policies to overcome such problems.

Lack of Long Lasting

This form of medium of exchange has faced the problem of durability because it can be destroyed by insects and fire. While in the case of the gold standard people easily stored it without any fear. So, currency notes lose the feature of being long-lasting.

Brings Uncertainty

Excessive amounts of printing new notes bring instability to the value of the paper currency. These variations in paper money shattered the confidence of people and negatively influence business and economic growth.

Lack of Automation

The lack of automation is another drawback of paper money because it requires Government and monetary authority involvement. Without the interference of certain authorities that medium of exchange ruins the economy.

Unstable

Paper currency considers unstable because Government can easily increases or decreases its supply by printing new notes while ignoring the specific reserve condition.

Lisa C. Townes

Lisa is a passionate travelers. She spends 3 months every year visiting different places worldwide. She has visited almost every famous place in the world. She herself is an affiliate blogger

Thinking to start a business or having options of starting your own business or getting partners for that? Might be thinking that is partnership better than a sole proprietorship or sole traders is better than a partnership.

Here are 15 key variations between Sole Proprietorship and Partnership to help you to make the right decision considering your present conditions.

Both Personal businesses & partnerships have few similarities as they can be started with and without a partnership deed, and can be started and closed anytime with consent but differences are another side of the coin.

Possibly, the advantages of a partnership are better than sole proprietorship’s advantages or disadvantages of a sole proprietorship are worst compared to partnership disadvantages

Difference Between Sole Proprietorship and Partnership

Business Formation

• It is easy to form and simple to run. There are no legal formalities for the commencement of a sole proprietorship business. It can be started within minutes
• A partnership deed and other legal documents are necessary for the formation of the partnership. Every business activity, responsibility, capital, or profit-sharing must be mentioned here. There are more than 27 important contents of the partnership deed to note down

Number of Partners

• In a sole proprietorship, there is no concept of more than one person.  Business is owned by one person only
• There are at least two people in each type of partnership but no more than twenty in ordinary business and ten in banking. You can have more partners in Joint stock companies

Contract

• There is one concept of any contract type due to one man. He/She has all decision powers
• It is created by contract. An agreement is the most important element of a partnership. No contract means no partnership, it may be oral or written but recommended is written

Capital

• As one man invests his amount into his business, capital volume remains limited
• Capital is contributed by two or more partners. Therefore capital volume may be increased by admitting new partners

Personal Presence

• Its management was to be conducted by one man only.  Therefore personal presence is compulsory. It won’t be managed without personally involving in proprietorship
• This kind of business may be conducted by one or two partners only. Therefore the personal presence of each partner is not necessary

Profit & Loss sharing

• One man enjoys a hundred percent profit from the business and if there is a loss he has to sustain all the losses
• The partnership’s prominent feature is profit and loss are distributed among all the partners of the firm. In case of loss, each partner may and may not feel a heavy burden

Rights Transfer

• A sole proprietor may easily transfer his business without the consent of another person
• One partner, cannot dispose of or transfer his business without the consent of all other partners

Power of Decision Making

• One man is the supreme authority of his business. Therefore he may take any action against any matter promptly
• All the matters are decided by mutual consultation. Therefore matters may not be disposed of promptly

Business Accountability

• As all business is owned by one man he has not to be obeyed any order. So there is no fear of being accountable to anyone
• As partners are accountable to one another, they have to keep an up-to-date record and correct information in connection with their business

Expansion of Business

• There are limited chances for the growth of business due to a lack of capital and managerial abilities
• There are more chances to expand the business volume due to a large number of partners

Business Stability

• There is no possibility of distribution due to one man. So this type of business may be run smoothly
• There is always a risk of dissolution due to misunderstanding and friction among the partners

Business Secrecy

• Secrecy may be maintained in this form of organization on account of man supervision
• As every partner knows about the internal affairs of the business so there are great chances of leakage of the secrecy

Abilities to Work

• One man cannot possess all types of technical and administrative abilities
• As there are a number of partners so the firm may enjoy the combined abilities of several heads

Expenses Distribution

• There are minimum expenses to organize and operate this form of organization
• Partners have to pay legal fees, registration fees, and other expenses. Therefore it is a costly organization comparatively.

Dissolution

• This kind of business may be dissolved easily without any legal formalities
• A partnership may not be dissolved without fulfillment of legal obligations

Lisa C. Townes

Lisa is a passionate travelers. She spends 3 months every year visiting different places worldwide. She has visited almost every famous place in the world. She herself is an affiliate blogger

The workmen compensation Act 1923 is the first measure of social security introduced in 1923 came into force from 1st July 1924. The workmen compensation is an act to provide for the payment by certain classes of employers to their workmen of compensation for injury by accident.

Importance of Workmen Compensation ACT 1923

It has been of great help to the employee and the employer both. There was much confusion in all cases of accidents before the introduction of this Act. Its proceedings were long drawn time-consuming and sheer wastage of time and natural resources.

The workmen compensation Act has abolished all the problems and difficulties. It declares the employee to get entitled to take benefit from the law without negligence. Under this Act 1923, the issue is as to whether the injury was accidental and arose out of and in the course of his employment and if the answer is yes, he would be entitled to get compensation, otherwise not.

The workmen compensation Act perform a great service to both the parties i.e. the employee and the employer. It provides a very simple procedure for the recovery of compensation.

It makes the possible to know, how much is to be paid, as schedules for different types of casualties are provided in the Act.

The workmen or his dependent are at liberty to either live a suit for damage against the employer and run the risk of the employer’s escape from liability.

So it is intended to promote the welfare of the public community and it does not concern itself with the measure of preventive nature.

Employer’s Liability under Workmen Compensation ACT 1923

In case of injury

Sec 3 of the workmen compensation Act 1923 provides that if personal injury is caused to a workman by accident arising out of and in the course of his employment, his employer shall be liable to pay compensation.

In the case of Physical Disease

Besides bodily injury, the section provides for employers liability to pay compensation to an employee of his if the employee contracts any of the occupational diseases mentioned in the schedule III.

Amount of Compensation

The amount of compensation will be determined by two factors i.e. (1) the number of wages (2) the nature of the injury.

According to section 4 of the Act 1923, the amount of compensation shall be as follows.

Where Death Result from the Injury:

Where death results from the injury to workmen in receipt of monthly wages failing within the limits of Rs.3000 as shown in the first column of schedule IV, the amount of compensation will be Rs.2,00,000.

Where Permanent Total Disablement results from the Injury

Where permanent total disablement result from injury to a workman in receipt of monthly wages falling within the limits of Rs.3000 as shown in the first column of schedule Iv, the amount of compensation will be Rs.2,00,000.

Where Permanent Partial Disablement results from the Injury

Specified in Schedule

In case of an injury specified in the schedule, I, such percentage of the compensation which would have been payable in the case of permanent total disablement as is specified therein as being the percentage of the loss of earning capacity caused by that injury, and.

Not Specified in schedule I:

If any sort of injury isn’t specified in Schedule I, Permanently Earning capacity loss due to that specific loss is proportionate to payable compensation.

Temporary Total or Partial Disablement

Where temporary total or partial disablement results from the injury, ½ of the monthly wages will be payable during the period of disablement or a period of one year, starts from the date of injury, whichever is less and thereafter only in case of chronic lung disease 1/3 of the monthly wages will be payable during the period of disablement or for a period of five years, starts from the date of injury, whichever is less.

Lisa C. Townes

Lisa is a passionate travelers. She spends 3 months every year visiting different places worldwide. She has visited almost every famous place in the world. She herself is an affiliate blogger

Sole proprietorship, Partnering business, and Public and Private limited are a few forms of business organization. Everyone has different features as well as advantages and disadvantages. Starting a business may be hard without knowledge of a country’s law.

UK Company law may be different from Germany. In general, the basics are the same. In this reading, you’ll be able to analyze the difference between a Partnership and Company [Public Limited].

The Difference Difference between a Partnership and a Company

1. Formation

Public Limited Company

There is a long and complicated process for the formation of a public company. Many legal documents are to be prepared and submitted to the registrar’s office which requires a long time.

Partnership

There is a simple process for the formation. No legal documents are necessary. Agreement by oral or written is required only for formation.

2. Liability

Public Limited Company

The liability of shareholders is limited to the unpaid value of the shareholders are not liable to settle the obligations of the company.

Partnership

It is one of the biggest disadvantages of a partnership is that every partner had unlimited liability in his firm. It means that the liability of partners is not limited to the invested amount but private assets are also liable to clear the liabilities of the firm.

3. Number of Members

Public Limited Company

There is no restriction on the maximum number of members. It may be a million or thousand but not less than seven.

Partnership

It consists of at least two partners but not more than twenty in the case of ordinary business and not more than ten in the case of banking business.

4. Transferability

Public Limited Company

There is no restriction for transforming of share of public company shareholders may easily dispose of their share in the stock exchange market.

Partnership

A partner cannot transfer his share and interest to another person without the consent of existing partners.

5. Entity

Public Limited Company

It is created by law and possesses a separate legal entity. So it can purchase property in its own name. it can sue in its separate position.

Partnership

The partnership’s important feature is to not have a separate legal entity from its members. Partners cannot be separated from the firm.

6. Capital

Public Limited Company

Its authorized capital is mentioned in the memorandum of association. It can be increased or decreased by special resolution which is passed in the shareholders meeting after the sanction of the court.

Partnership

Its capital is described in the agreement. It may be changed by mutual consent of the partners.

7. Maintenance of Books

Public Limited Company

Statutory books and other account books are to be maintained by law.

Partnership

There is no compulsion to keep statutory or definite books. Each partner is allowed to inspect and copy the accounts.

8. Legislation

Public Limited Company

The activities of public companies are controlled by the company ordinance 1984.

Partnership

It is controlled by the partnership Act 1932 which was adopted in our country after partition.

9. Management Authority

Public Limited Company

Shareholders who are the actual owners of the company are not allowed to participate in the activities of the company but the board of directors is elected by the shareholders and is elected by the shareholders which are considered the supreme authority of the company. so all the activities are conducted by these persons.

Partnership

Each partner is allowed to conduct personally the business activities. But generally, one or two partners are selected to manage the firm.

10. Profit

Public Limited Company

Profit is distributed among the shareholders according to the provision of the Articles and the decision of the Board of Directors.

Partnership

It is distributed among the partners according to the partnership deed.

11. Audit

Public Limited Company

Accounts must be audited by a qualified chartered accountant according to the company’s ordinance.

Partnership

The audit is not compulsory by law but it depends upon the agreement.

12. Dissolution

Public Limited Company

It cannot dissolve easily. There is a separate legal process for the winding up of the company. it can be wound up according to the provision of the Company Act.

Partnership

It can be dissolved easily by mutual consent of the partners. It may be dissolved by any one of the partners by serving notice of fourteen days to other partners

13. Right of Issue

Pubic Limited Company

It can issue shares, debentures, and other securities to increase its capital and business fund

Partnership

It cannot issue any type of securities in the market to increase its financial sources.

14. Life

Pubic Limited Company

It has continued existence. The life of the directors and shareholders is not connected with the running business life of the company. so its activities are not affected by the retirement or death of any shareholders.

Partnership

It does not possess long life. Its business may be affected by the death insolvency or retirement of any partner.

15. Submission of Reports

Pubic Limited Company

Certain documents, statements, and reports must be submitted to the government authority.

Partnership

There is no restriction to submitting the various reports and documents to any authority.

16. Business

Pubic Limited Company

The promoters are restricted to carry on a business that is mentioned in the object clause of the memorandum of association.

Partnership

Partners may carry on any type of business and it may easily be changed by mutual consultation.

17. Meeting

Pubic Limited Company

It has to call necessary meetings of shareholders in which problems are disposed of by various resolutions.

Partnership

No compulsion to call any type of meeting and submission reports to the registrar.

Difference Between Partnership & Public Limited Company

Difference Between Partnership and Private Limited Company

Lisa C. Townes

Lisa is a passionate travelers. She spends 3 months every year visiting different places worldwide. She has visited almost every famous place in the world. She herself is an affiliate blogger