Meaning-: Partnership is a formal agreement between two or more people to who agreed to manage and operate a business together. They share the profits, losses, and right, responsibilities of the business. This is a common business structure, especially for smaller businesses. There are different types of partnerships.

Simple Definition: – As per Section 4 of Indian Partnership Act 1932 Partnership is an agreement between two or more person who have agreed to share the profit of business carried by
all or any of them.

Nature of Partnership

Partnership is not considered a separate legal entity from the partners. Here Some Points That Define This Clearly-:

• No independent existence: The partnership doesn’t have its own separate life from its partners. It ends if a partner leaves or dies.
• Liability: Partners have unlimited liability. This means their personal assets can be used for payment of partnership firm liability.
• Ownership: Property and assets are owned by the partners, not the partnership itself.

ESSENTIAL FEATURES OR CHARACTERISTICS OF PARTNERSHIP

There are several essential features or characteristics of a partnership:

1. Agreement: Partnership is formed by a contractual agreement between parties. This can be either written or oral between two or more parties. This agreement defines the rights
and responsibilities of each partner. Agreement defines how the profit sharing will be done and how the business will be run.

2. Business Purpose: Partnerships are created to carry on a lawful business. This could be anything from a retail store to a law firm to a consulting service.

3. Sharing of Profits and Losses: Partners agree to share the profits and losses generated by the business venture. Typically, profits are divided according to a predetermined agreement, which may be based on factors like capital contribution or time invested.

4. Mutual Agency: Each partner is considered an agent of the partnership. This means their actions during business are binding on the partnership.

5. Unlimited Liability: In ageneral partnership, partners have unlimited liability. This means they are personally liable for the debts and obligations of the partnership firm,
even if they exceed the amount of money they invested. if the Partnership business cannot Pay the obligation, then in that situation personal assets of the partner can be used to satisfy these debts. (There are some exceptions like Limited Liability Partnerships (LLPs) that offer some liability protection.)

RIGHTS OF PARTNERS IN PARTNERSHIP

Partners in a partnership have several important rights, which can be categorized into two areas: management rights and financial rights. Here’s some key Rights are as follows:

Management Rights:

• Right to Participate: Each partner has the right to take part in the conduct of the business. This includes offering their ideas, participating in decision-making, and
  having access to the partnership’s financial information.
• Right to Information: Partners have the right to inspect the partnership books and financial records to understand the financial health of the business.
• Right to Vote: Unless otherwise agreed upon, partners have an equal right to vote on major decisions affecting the partnership.

Financial Rights:

• Right to Share Profits: Partners are entitled to share the profits generated by the partnership, according to the partnership agreement. If there’s no agreement, profitsare typically shared equally.
• Right to Interest on Capital Contributions: Some partnerships may agree to pay partners interest on the capital they contribute to the business.
  If the Partnership deed is silent then Partners are not entitled to Receive the Interest on Capital.
  
• Right to Reimbursement: Partners can be reimbursed for expenses incurred while conducting business on behalf of the partnership.
  
• Right to Indemnity: if a partner spends their own money on something necessary and appropriate for the business, the partnership has to pay them back.