Answer the following questions:

How are partnership firms started ? Explain briefly.

Sole trading concerns characterized by their sole owners faced several disadvantages. Lack of capital for expansion, limited managerial abilities, singular burden of loss, short life expectancy was some of the problems affecting sole trading concerns. This led to the formation of partnership firms. Partnership firms are characterized by the division of ownership between two or more partners. In the Partnership Firm Act of 1932, it is defined as the relation between the persons who have agreed to share the profits of a business carried on by all or any of them acting for all. According to this Act, the number of partners for banking businesses have been fixed at 10 while the same is 20 for other general business ventures.