An Association Firm is a popular form of business creation for businesses that are owned, managed and controlled by a For-Profit Association. Partnership companies are relatively easy to start are prevalent among small and medium-sized enterprises in the unorganized sectors. With the introduction of limited liability companies in India, partnership companies are rapidly losing their prevalence due to the additional advantages offered by a limited liability company.
There are two types of associated companies, companies of registered and unregistered companies. It is not mandatory to register a company of the Alliance; However, it is advisable to register a Partnership company due to the added advantages. Associated companies are created by writing a partnership deed between the partners and IndiaFilings can help you start a partnership company registered or unregistered in India.
Property form property suffers from certain limitations such as limited resources, limited ability and unlimited liability. Expansion in business requires more capital and management skills and also involves more risk. An owner finds it unable to meet these requirements. This call for more people get together, with different edges and start the business. For example, a person who lacks managerial skills but can have capital.
Another person who is a good manager but can not have capital. When these people join together, they pool their capital and skills and organize a business, it's called an association. The partnership grows essentially because of the limitations or disadvantages of ownership.
The Indian Association Act, 1932, section 4, defines association as "the relationship between persons who have agreed to share the business benefits carried out by all or some of them acting for all." The Uniform Association Act of the United States defined an association "as an association of two or more persons to conduct as co-owners of a for-profit enterprise."
According to J. L. Hanson, "a company is a form of business organization in which two or more persons up to a maximum of twenty meet to undertake some type of business activity." Now, we can define the partnership as an association of two or more people who have agreed to share the benefits of a business running together. This business can be carried out by all or any of them acting for everyone.
The people who own the business of the association are individually called "partners" and collectively are called as "company" or "partnership company". The name under which the company's business is carried out is called the "name of the company". In a way, the company is merely an abbreviation of partners.