Essential Features or Characteristics Of Partnership

The essential characteristics of partnership are given below :

1. Association of Two or More Persons:
Partnership is an association of two or more persons who have agreed to carry on a business and share profits or losses.

2. Agreement:
Partnership comes into existence by an agreement, either written or oral, and not by the status or process of law. The agreement among the partners is the basis of their relationship which may be for a particular venture, for a period or at will. The written agreement among the partners is termed as Partnership Deed.

3. Carrying on a Business:
Agreement should be for the purpose of carrying on a business. 

4. Lawful Business:
The business for which partnership is formed must be legal.

5. Profit-Sharing:
The agreement between/among the partners must be to share profits or losses. It is not essential that all the partners must share the losses also. There may be a specific provision in the Partnership Deed that a particular partner or partners shall not bear the losses.

6. Business can be carried on by all or any of the partners acting for all:
The business of the partnership can be carried on by all partners or by any one of  them acting for all partners. In other words, partners are agents as well as the principals.