Understanding Partnership Essentials: Types, Dissolution, and LLP Act
Essentials of Partnership
Meaning and Definition: Section 4 of the Partnership Act 1932 defines partnership as “the relation between persons who have agreed to share the profits of a business carried on by all or any of them acting for all.”
Key Elements of a Partnership
- Two or More Persons: There must be at least two persons to form a partnership. A person cannot enter into partnership with themselves. The maximum number of persons in a partnership should not exceed 10 in the case of banking business
Understanding Different Types of Business Partnerships
Soc Collective
A Soc Collective is a type of partnership where the partners have unlimited liability and are severally liable for the obligations of the society. The main features are:
- The directors of the company are all the partners, one or more of them, or a delegated third party.
- The name is formed by the name of all partners or any of them followed by the word “and Company.”
- The responsibility that affects the partners is unlimited. The partners are accountable for the obligations of the society
Understanding Partnerships, Limited Partnerships, and Corporations
Partnerships, Limited Partnerships, and Corporations
General Partnership
A general partnership operates under a collective name, with all partners bearing joint and several unlimited liability for the partnership’s obligations.
Key Features:
- Character Personality: Membership is not transferable without the consent of all other partners.
- Title: The partnership name will include the names of all, some, or one of the partners. In the latter two cases, “& Company” must be added, along with the abbreviations
Endorsement vs. Assignment of Credit: Key Differences Explained
Endorsement vs. Assignment of Credit: Key Differences
Autonomy and Abstraction
Assignment of Credit
- As a rule, is “pro solute” but not “pro solver.”
- The originating lender is accountable to the new lender for the existence of credit.
- Enforceability exceptions are personal.
Endorsements
- Is “pro solute” and also “pro solver.”
- The originating lender responds to the endorsee for solvency.
- Unavailability of personal exceptions.
Beware of exceptions personal effects in good faith.
Acts of “Endorsement” That Are
Read MoreUnderstanding Letters of Credit: Ratings, Forms, and Acts
Letters of Credit Ratings
About the Model: Free (letter and note) and bound (check and duplicate).
The Form: Order (letter, check, and duplicate) (three characters: the drawer, drawee, and payee) and promise to pay (note) (two characters: the prospective and beneficiary).
Assumptions as to Issue: Causal (duplicate – Stay connected to the business that originated) and non-causal (letter (abstract), notes, and checks).
On Movement: Bearer (circulated by mere tradition) or nominative (endorsement) (order
Read MoreUnderstanding Vouchers, Receipts, Promissory Notes, and More
Understanding Key Business Documents
Return to Voucher
This voucher is used to execute the delivery or transfer of goods sold. The person receiving the property records their compliance, finalizing the seller’s right to collect payment and the buyer’s obligation to pay. It provides the basis for preparing a refer factura.
The voucher extends in triplicate:
- The signed original is delivered by the seller to the purchaser.
- The duplicate, with the purchaser’s agreement confirming receipt, is kept by the