In most partnerships, partners are involved in the operation of the business. Their regular participation facilitates crucial decisions, as formal meetings do not need to be approved before action can be taken. If the partners agree on a change in strategy or structure, or approve the purchase of the necessary equipment, no additional approval is required. Partnership is an agreement to do business together. Thus, each partner has the right to participate in the day-to-day management. Decisions are taken by consensus. In other words, without the unanimous will of all partners, no important business decision can be made. However, responsibilities are shared between the partners. A person can run the business on behalf of others. A partnership is based on the principle of mutual trust, trust and understanding between partners. Each partner must act in the interest of all. When trust is broken and partners work on an initial goal, the company is crushed under its own weight. The survival of a partnership society depends on the utmost good faith and altruism.

The essence of partnership is team spirit and cooperation. All partners must be fair and loyal to each other and they must provide complete information about the functioning of the partnership enterprise. A partner acts as a trustee of other partners. He is morally and legally obliged to be honest and sincere in his relations with other partners. Partnership involves business and where there is no business, there is no partnership. It must be clearly stated that a partnership is not a not-for-profit association or association and that its primary purpose is to carry out legitimate and for-profit activities. Like a person`s income, a partnership`s income is taxed on the plate system. The tax rate gradually increases as income increases. If the corporation is registered under the Income Tax Act (as opposed to registration under the Indian Partnerships Act), the income of the corporation is divided among the partners and each partner is assessed separately for income tax.

However, if the company is not registered, the company will have to pay tax on its profits as opposed to the income of the partners. Partners may agree to share profits and losses based on their percentage of ownership, or this department may be allocated to each partner in equal shares regardless of ownership participation. It is necessary that these conditions are clearly stated in the partnership contract in order to avoid conflicts throughout the life of the company. The articles should also prescribe when profit can be derived from the company. At common law, there are two fundamental forms of partnership:[18] Rules relating to the departure of a partner due to a death or exit from the business should also be included in the agreement. These terms may include a purchase and sale contract detailing the valuation process, or may require each partner to maintain a life insurance policy that identifies the other partners as beneficiaries. A partner is not allowed to sell or transfer its share to a third party without the consent of other partners. The free transferability of shares is not possible in a partnership. All partners are jointly and severally responsible for all activities of the partnership. .