Prior to the year 1932, there was no arrangement for the registration of firms in India. But after the enforcement of the Partnership Act, 1932, provisions for registration of firms were made. But for partnership firms, registration was made voluntary and not compulsory, or registration of the firm is dependent on the will of the partners. Nonregistration of the firm creates a number of difficulties. Therefore registration of the firm is very beneficial.Read More »Registration of Firms
A partner has unlimited personal liability in a partnership firm. The liabilities of partners are unlimited in all firm contracts. They are jointly and severally liable for all torts committed by one of the partners or by a firm employee within the scope of the partnership’s business.Read More »Duties, Obligations and Liabilities of Partners
A partnership is a voluntary organization of two or more persons who agree to earn profits from a lawful business and share it among themselves. The persons who participate in this business are individually called ‘Partners’ and cumulatively called a ‘Firm’. The name in which the business is carried on is called ‘the name of the firm’.
The partner who has invested more in partnership business and directly involves in business activities is called an active partner. The partners who have invested money but involve in business activity is called sleeping partner. The partner who has invested money but nominated as a partner is called a nominal partner. The partner who is retired from the business but investment is not written is called quasi-partner.
A partnership firm is different from a Sole Proprietorship in terms of the rights of a partner.
Introduction and Meaning
Partnership is the mutual relationship between two or more persons, who make a contract to share profits and losses among themselves from the exercises of a specific business. In other words, when two or more persons agree to carry on a business for mutual profits, it is said that they have formed a partnership.
The rights of a partner in a partnership firm are different from the counterpart of a sole proprietorship firm.
Definition of Sole Proprietorship
Sole Proprietorship definition according to Prof Hynes
Sole Proprietorship is that form of business which has a single owner, who has the total responsibility of the business, who runs the business and also bears the risk on the failure of business.
Despite high mortality, the sole entrepreneur survives.
In the words of Dr. John A Shubin
Under the Sole Trader-ship Business, a single man is an organizer; he is the owner and runs the business by his own name.
Meaning of Sole Proprietorship
Sole trader-ship (proprietorship) is that form of business organization whose owner is just one person, who is called the sole trader. This person invests capital in the business and is solely responsible for all the profits and losses of the business. The same person is the manager and organizer of the business.
Advantages, Merits, and Importance
Following are the merits (or importance) of the sole proprietorship system
Read More »Proprietorship Advantages, Merits and Importance
Introduction to Sole Proprietorship
Sole trader-ship or proprietorship is the oldest form of business in all the countries of the world. Along with the progress of the business, its form has also been changing. But due to its simplicity, quick formation, and easiness, this form is the most popular and in practice in the world.
IMPORTANCE OR BENEFITS OF THE LAW OF EQUI-MARGINAL UTILITY
Law of Equi-Marginal Utility has an important place in economics. Even though it is highly criticized, its importance cannot be ignored. This applies in every field of economics, which is clear from the following
Read More »Equi-Marginal Utility: Importance of the Law
CRITICISMS, LIMITATIONS OR EXCEPTIONS OF LAW OF EQUI-MARGINAL UTILITY
Following are the main reasons for the criticism of the Law of Equi-marginal utility by H. H. Gossen. Although, it is a basic law of economics and consumers knowingly or unknowingly are compelled, to follow this law. This law is applicable in every field of economic analysis.
Read More »Law of Equi-Marginal Utility : Criticism and Limitation
INTRODUCTION OF LAW OF EQUI-MARGINAL UTILITY
We know that the wants of every man are unlimited. Wants arise again and again but man has limited means (income) to fulfill his wants and means have alternative uses. Thus, man always faces the problem of distribution of limited means of alternative uses, on his wants; so that, he may get maximum satisfaction (or utility). Law of Equi-Marginal Utility presents the solution to this problem. This law states that if a person, wishes to get maximum satisfaction from his income, he should spend his income on different items, in such a way that the utility of the last unit of money spent on each commodity, should be equal or almost equal. This law of consumption was propounded by a French Economist, H. H. Gossen in 1854 and it is also known as the Second Law of Gossen.
Read More »Definition of Law of Equi-Marginal Utility