The Indian Partnership Act, 1932 is a law that governs partnerships in India. It defines the rights, duties, and liabilities of partners in a partnership firm. Partnership is a group of two people who agree to share profits in a business and to carry a business.
Definition of Partnership: Section 4 According to the act, a partnership is the relation between persons who have agreed to share profits of a business carried on by all or any of them acting for all.
Looking at the section 4 it clearly states following point
There has to be partnership between two or more people
They will agree to share the profits, though the loss isn’t mentioned but it is an implied term that in any business there has to be an inference of loss
They will carry on a business , it means business should be carried on and in existence.
There has to exist the principle of mutual agency among all.
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