State any two characteristics of partnership form of business organization.

Question

Accepted Answer

1. Two or more persons: There must be at least 2 persons to enter into contract to form partnership.

2. Agreement: The relation of partnership arises from contract and not from status.

3. Profit sharing: The objective of the business is to make profits and distribute the same amongst partners.

4. Unlimited liability: The liability of the partners is unlimited.

5. Implied authority: Any partner can act on behalf of the firm.

6. Mutual agency: Every partner is principal as well as agent of other partners.