A partnership is a type of business entity A business is a legally recognized organization designed to provide goods and/or services to consumers. Businesses are predominant in capitalist economies. Most businesses are privately owned. A business is typically formed to earn profit that will increase the wealth of its owners and grow the business itself. The owners and operators of a in which partners (owners) share with each other the profits or losses of the business. Partnerships are often favored over corporations A corporation is an institution that is granted a charter recognizing it as a separate legal entity having its own privileges, and liabilities distinct from those of its members. There are many different forms of corporations, most of which are used to conduct business for taxation purposes, as the partnership structure does not generally incur a tax on profits before they are distributed to the partners (i.e. there is no dividend tax A dividend tax is an income tax on dividend payments to the stockholders of a company levied). However, depending on the partnership structure and the jurisdiction Jurisdiction is the practical authority granted to a formally constituted legal body or to a political leader to deal with and make pronouncements on legal matters and, by implication, to administer justice within a defined area of responsibility. The term is also used to denote the geographical area or subject-matter to which such authority in which it operates, owners of a partnership may be exposed to greater personal liability than they would as shareholders A mutual shareholder or stockholder is an individual or company that legally owns one or more shares of stock in a joint stock company. A company's shareholders collectively own that company and are the members of the company by signing the memorandum of association . Thus, the typical goal of such companies is to enhance shareholder value of a corporation.

Definition in civil law

In civil law systems Civil law is a legal system inspired by Roman law, the primary feature of which is that laws are written into a collection, codified, and not determined by judges. Conceptually, it is the group of legal ideas and systems ultimately derived from the Code of Justinian, but heavily overlaid by Germanic, ecclesiastical, feudal, and local practices, as, a partnership is a nominate contract In law, a contract is an agreement between two or more parties which, if it contains the elements of a valid legal agreement, is enforceable by law or by binding arbitration. That is to say, a contract is an exchange of promises with specific legal remedies for breach. These can include Compensatory remedy, whereby the defaulting party is required between individuals who, in a spirit of cooperation, agree to carry on an enterprise; contribute to it by combining property, knowledge or activities; and share its profit. Partners may have a partnership agreement, or declaration of partnership and in some jurisdictions Jurisdiction is the practical authority granted to a formally constituted legal body or to a political leader to deal with and make pronouncements on legal matters and, by implication, to administer justice within a defined area of responsibility. The term is also used to denote the geographical area or subject-matter to which such authority such agreements In law, a contract is an agreement between two or more parties which, if it contains the elements of a valid legal agreement, is enforceable by law or by binding arbitration. That is to say, a contract is an exchange of promises with specific legal remedies for breach. These can include Compensatory remedy, whereby the defaulting party is required may be registered and available for public inspection. In many countries, a partnership is also considered to be a legal entity An entity is something that has a distinct, separate existence, though it need not be a material existence. In particular, abstractions and legal fictions are usually regarded as entities. In general, there is also no presumption that an entity is animate. Entities are used in system developmental models that display communications and internal, although different legal systems reach different conclusions on this point.

Germany

Partnerships may be formed in the legal forms of General Partnership Partnerships have certain default characteristics relating to both the relationship between the individual partners and (b) the relationship between the partnership and the outside world. The former can generally be overridden by agreement between the partners, whereas the latter generally cannot be (Offene Handelsgesellschaft, OHG) or Limited Partnership A limited partnership is a form of partnership similar to a general partnership, except that in addition to one or more general partners , there are one or more limited partners (LPs). It is a partnership in which only one partner is required to be a general partner (Kommanditgesellschaft, KG). A partnership can be formed by only one person. In the OHG, all partners are fully liable for the partnership's debts, whereas in the KG there are general partners with unlimited liability and limited partners whose liability is restricted to their fixed contributions to the partnership. Although a partnership itself is not a legal entity, it may acquire rights and incur liabilities, acquire title to real estate and sue or be sued

China

In mainland China, a partnership enterprise encompasses two types of partnerships：general partnerships and limited partnerships.^[1] A general partnership comprises general partners who bear joint and several liabilities for the debts of the partnership enterprise.^[1] There is a special general partnership which can be employed by professional service providers such as accountant firms and law firms. A limited partnership enterprise includes general partners and limited partners where the limited partners are liable only to the extent of their capital contributions.^[1]

Japan

The Japanese civil code provides for partnerships by contract, which are commonly known as nin'i kumiai (任意組合^?) or "voluntary partnerships." A more recent statute has allowed for the creation of limited liability partnerships A limited liability partnership is a partnership in which some or all partners (depending on the jurisdiction) have limited liability. It therefore exhibits elements of partnerships and corporations. In an LLP one partner is not responsible or liable for another partner's misconduct or negligence. This is an important difference from that of a.

One form of partnership unique to Japan is the tokumei kumiai Tokumei kumiai , literally "anonymous partnerships," are a Japanese bilateral contract governed by the Commercial Code of Japan, Article 535 et seq. In English, they are called TK, anonymous partnerships or silent partnerships, etc. In many respects they are similar to common law limited partnerships or "anonymous partnership," in which partners have limited liability so long as they remain anonymous in their capacity as partners and do not participate in the operation of the partnership. Japan provides for partnership-like corporations A corporation is an institution that is granted a charter recognizing it as a separate legal entity having its own privileges, and liabilities distinct from those of its members. There are many different forms of corporations, most of which are used to conduct business called mochibun kaisha.

Common law

Under common law Common law is law developed by judges through decisions of courts and similar tribunals , rather than through legislative statutes or executive branch action. A "common law system" is a legal system that gives great precedential weight to common law, on the principle that it is unfair to treat similar facts differently on different legal systems, the basic form of partnership is a general partnership Partnerships have certain default characteristics relating to both the relationship between the individual partners and (b) the relationship between the partnership and the outside world. The former can generally be overridden by agreement between the partners, whereas the latter generally cannot be, in which all partners manage the business and are personally liable for its debts. Two other forms which have developed in most countries are the limited partnership A limited partnership is a form of partnership similar to a general partnership, except that in addition to one or more general partners , there are one or more limited partners (LPs). It is a partnership in which only one partner is required to be a general partner (LP), in which certain limited partners relinquish their ability to manage the business in exchange for limited liability Limited liability is a concept whereby a person's financial liability is limited to a fixed sum, most commonly the value of a person's investment in a company or partnership with limited liability. In other words, if a company with limited liability is sued, then the plaintiffs are suing the company, not its owners or investors. A shareholder in a for the partnership's debts, and the limited liability partnership A limited liability partnership is a partnership in which some or all partners (depending on the jurisdiction) have limited liability. It therefore exhibits elements of partnerships and corporations. In an LLP one partner is not responsible or liable for another partner's misconduct or negligence. This is an important difference from that of a (LLP), in which all partners have some degree of limited liability.

There are two types of partners. General partners have an obligation of strict liability In law, strict liability is a standard for liability which may exist in either a criminal or civil context. A rule specifying strict liability makes a person legally responsible for the damage and loss caused by his or her acts and omissions regardless of culpability . Strict liability is prominent in tort law (especially product liability), to third parties injured by the Partnership. General partners may have joint liability or joint and several liability If parties have joint liability, then they are each liable up to the full amount of the relevant obligation. So if a husband and wife take out a loan from a bank, the loan agreement will normally provide that they are to be "jointly liable" for the full amount. If one party dies, disappears or is declared bankrupt, the other remains depending upon circumstances. The liability of limited partners is limited to their investment in the partnership.

A silent partner is one who still shares in the profits and losses of the business, but who is uninvolved in its management, and/or whose association with the business is not publicly known; these partners usually provide capital.

Hong Kong

Main article: Partnership (Hong Kong) A partnership in Hong Kong is a business entity formed by the Partnerships Ordinance, which defines a partnership as "the relation between persons carrying on a business in common with a view of profit" and is not a joint stock company or an incorporated company. If the business entity registers with the Registrar of Companies it takes

A partnership in Hong Kong is a business entity formed by the Hong Kong Partnerships Ordinance, which defines a partnership as "the relation between persons carrying on a business in common with a view of profit" and is not a joint stock company or an incorporated company.^[2] If the business entity registers with the Registrar of Companies it takes the form of a limited partnership defined in the Limited Partnerships Ordinance.^[3] However, if this business entity fails to register with the Registrar of Companies, then it becomes a general partnership as a default.^[3]

Australia

Main article: Partnership (Australia) Rule 1 - s.6provides that there must be joint-ownership. This is rather self-explanatory but it should be noted that the mere fact that persons may be joint-tenants or have part ownership do not in themselves create a partnership. Typically, where the rules below point towards a partnership, such would generally satisfy this rule

Summarising s. 5 of the Partnership Act 1958 (Vic) (hereinafter the "Act"), for a partnership in Australia to exist, four main criteria must be satisfied. They are:

• Valid Agreement between the parties;
• To carry on a business – this is defined in s. 3 as "any trade, occupation or profession";
• In Common – meaning there must be some mutuality of rights, interests and obligations;
• View to Profit – thus charitable organizations cannot be partnerships (charities are typically incorporated associations under Associations Incorporations Act 1981 (Vic))

Partners share profits and losses. A partnership is basically a settlement between two or more groups or firms in which profit and loss are equally divided

United Kingdom limited partnership

A limited partnership in the United Kingdom consists of:

• One or more people called general partners, who are liable for all debts and obligations of the firm; and
• One or more people called limited partners, who contribute a sum/sums of money as capital, or property valued at a stated amount. Limited partners are not liable for the debts and obligations of the firm beyond the amount contributed.

Limited partners may not:

• Draw out or receive back any part of their contributions to the partnership during its lifetime; or
• Take part in the management of the business or have power to bind the firm.

If they do, they become liable for all the debts and obligations of the firm up to the amount drawn out or received back or incurred while taking part in the management, as the case may be.

India and Pakistan

According to section 4 of the Partnership Act of 1932, which applies in both India and Pakistan, "Partnership is defined as the relation between two or more persons who have agreed to share the profits and losses according to their ratio of business run by all or any one of them acting for all". This definition superseded the previous definition given in section 239 of Indian Contract Act 1872 as – “Partnership is the relation which subsists between persons who have agreed to combine their property, labour, skill in some business, and to share the profits thereof between them”. The 1932 definition added the concept of mutual agency.

USA

The federal government of the United States does not have specific statutory law governing the establishment of partnerships. Instead, each of the fifty states as well as the District of Columbia has its own statutes and common law that govern partnerships. These states largely follow general common law principles of partnerships whether a general partnership Partnerships have certain default characteristics relating to both the relationship between the individual partners and (b) the relationship between the partnership and the outside world. The former can generally be overridden by agreement between the partners, whereas the latter generally cannot be, a limited partnership A limited partnership is a form of partnership similar to a general partnership, except that in addition to one or more general partners , there are one or more limited partners (LPs). It is a partnership in which only one partner is required to be a general partner or a limited liability partnership A limited liability partnership is a partnership in which some or all partners (depending on the jurisdiction) have limited liability. It therefore exhibits elements of partnerships and corporations. In an LLP one partner is not responsible or liable for another partner's misconduct or negligence. This is an important difference from that of a. In the absence of applicable federal law, the National Conference of Commissioners on Uniform State Laws The National Conference of Commissioners on Uniform State Laws is a non-profit, unincorporated association commonly referred to as U.S. Uniform Law Commission in the United States that consists of commissioners appointed by each state, the District of Columbia, the Commonwealth of Puerto Rico and the United States Virgin Islands. The purpose of has issued non-binding models laws (called uniform act) in which to encourage the adoption of uniformity of partnership law into the states by their respective legislatures. This includes the Uniform Partnership Act and the Uniform Limited Partnership Act. Although the federal government does not have specific statutory law for establishing partnerships, it has an extensive and hyperdetailed statutory scheme for the taxation of partnerships The rules governing partnership taxation, for purposes of the U.S. Federal income tax, are codified as Subchapter K of Chapter 1 of the U.S. Internal Revenue Code . Partnerships are "flow-through" entities. Flow-through taxation means that the entity does not pay taxes on its income. Instead, the owners of the entity pay tax on their & in the Internal Revenue Code The Internal Revenue Code is the main body of domestic statutory tax law of the United States organized topically, including laws covering the income tax (see Income tax in the United States), payroll taxes, gift taxes, estate taxes and statutory excise taxes. The Internal Revenue Code is published as Title 26 of the United States Code (USC), and. The IRC is Title 26 of the United States Code wherein Subchapter K of Chapter 1 creates tax consequences of such great scale and scope that it effectively serves as a federal statutory scheme for governing partnerships.

Islamic Law

The Qirad The qirad was one of the basic financial instruments of the medieval Islamic world. It was an arrangement between one or more investors and an agent where the investors entrusted capital to an agent who then traded with it in hopes of making profit. Both parties then received a previously settled portion of the profit, though the agent was not and Mudaraba institutions in Islamic law Sharia is the sacred law of Islam. All Muslims believe Sharia is God's law, but they have differences between themselves as to exactly what it entails. Modernists, traditionalists and fundamentalists all hold different views of Sharia, as do adherents to different schools of Islamic thought and scholarship. Different countries and cultures have and economic jurisprudence Islamic economics refers to the has been called a field of literature that "identifies and promotes an economic order that conforms to Islamic scripture and traditions," and in the economic world an interest-free Islamic banking system. The literature originated in "the lates 1940s, and especially" after "the mid-1960s.& were the precursors to the modern limited partnership A limited partnership is a form of partnership similar to a general partnership, except that in addition to one or more general partners , there are one or more limited partners (LPs). It is a partnership in which only one partner is required to be a general partner. These were developed in the medieval Islamic world The Islamic Golden Age is traditionally dated from the mid-8th to the mid-13th century A.D. although it has been extended by one scholar to at least the 15th century. During this period, artists, engineers, scholars, poets, philosophers, geographers and traders in the Islamic world contributed to agriculture, the arts, economics, industry, law,, when Islamic economics Islamic economics in practice, or economic policies supported by self-identified Islamic groups, has varied throughout its long history. Traditional Islamic concepts having to do with economics included flourished and when early trading companies A joint stock company is a type of business entity: it is a type of corporation or partnership involving two or more legal persons. Certificates of ownership (or stocks) are issued by the company in return for each financial contribution, and the shareholders are free to transfer their ownership interest at any time by selling their stockholding, big businesses Big Business is a term used to describe large corporations, in either an individual or collective sense. The term first came into use in a symbolic sense subsequent to the American Civil War, particularly after 1880, in connection with the combination movement that began in American business at that time. Organizations that fall into the category, contracts In law, a contract is an agreement between two or more parties which, if it contains the elements of a valid legal agreement, is enforceable by law or by binding arbitration. That is to say, a contract is an exchange of promises with specific legal remedies for breach. These can include Compensatory remedy, whereby the defaulting party is required, bills of exchange A negotiable instrument is a specialized type of "contract" for the payment of money that is unconditional and capable of transfer by negotiation. As payment of money is promised later, the instrument itself can be used by the holder in due course frequently as money. Common examples include cheques, banknotes , and commercial paper and long-distance international trade International trade is exchange of capital, goods, and services across international borders or territories.. In most countries, it represents a significant share of gross domestic product . While international trade has been present throughout much of history (see Silk Road, Amber Road), its economic, social, and political importance has been on were established.^[4]

In medieval Italy Italy (pronounced /ˈɪtəli/ ; Italian: Italia [iˈtaːlja]), officially the Italian Republic (Italian: Repubblica italiana), is a country located partly on the European Continent and partly on the Italian Peninsula in Southern Europe and on the two largest islands in the Mediterranean Sea, Sicily and Sardinia. Italy shares its northern, Alpine, a business organization known as the commenda appeared in the 10th century. As an institution, the commenda is very similar to the qirad but whether the qirad transformed into the commenda, or the two institutions evolved independently cannot be stated with certainty.^[5]

Notes

1. ^ ^{a b c} Partnership Enterprise Law, Chapter 1, article2
2. ^ Hong Kong Partnerships Ordinance, Chapter 38, section 3
3. ^ ^{a b} Hong Kong Limited Partnerships Ordinance, Chapter 37, section 4
4. ^ Jairus Banaji (2007), "Islam, the Mediterranean and the rise of capitalism", Historical Materialism Historical Materialism is an interdisciplinary journal published quarterly. It is dedicated to exploring and developing the critical and explanatory potential of Marxist theory. The journal started as a project at the London School of Economics from 1995 to 1998 15 (1): 47–74, Brill Publishers Brill (known as E. J. Brill, Koninklijke Brill, Brill Academic Publishers) is an international academic publisher founded in 1683 in Leiden, the Netherlands. With offices in Leiden and Boston, Brill today publishes more than 100 journals and around 600 new books and reference works each year. In addition, Brill is a provider of primary source.
5. ^ Robert H. Hillman, "Limited Liability in Historical Perspective", (Washington and Lee Law Review, Spring 1997)

See also

• Business partnering The mission of Business partnering and the key-aspects of the discipline has been developed recently in the tourism field. The mission of Business partnering consists in "creating, organizing, developing and enforcing operative (short-term), tactical (medium-term) and strategic (long-term) partnerships" (Droli, 2007)
• Corporation A corporation is an institution that is granted a charter recognizing it as a separate legal entity having its own privileges, and liabilities distinct from those of its members. There are many different forms of corporations, most of which are used to conduct business
• Equity partner
• General partnership
• Joint venture
• Limited liability partnership (LLP)
• Limited partnership (LP)
• Partnership accounting
• Partnership taxation
• Strategic Alliance
• Types of business entity

External links

• Reference for Business 2nd edition article about partnerships

Categories: Business law | Types of companies | Partnerships

See Also:

What Links Here:

Recently Viewed Pages:

• Home
• Boarding (Transport): News
• Tour Operator: Blogs
• Garden Tourism: Encyclopedia
• Domain Details
• Tourism: Encyclopedia
• Traveller: Dictionary
• Travel: Dictionary
• Customer: Encyclopedia
• Supply Chain: Encyclopedia

Most Popular Pages:

• Boarding (Transport): News
• Tour Operator: Blogs
• Kentucky: Blogs
• Rail Transport: Blogs
• Lost Luggage: Blogs
• Domain Details
• International Association of Travel Agents Network: Blogs
• Partnership: Web Search
• Register: News
• Partnership: News Search

Related 'Partnership' Searches: