Question

Partnership firm is a separate business entity but in legal point of view it is not separate business entity.

what does this means? Is partenership is separate businees entity or not?

Answer 1

Partnership is an association of two or more persons who have agreed to carry on a business and share its profits and losses. Partnership is a separate business entity but from accounting viewpoint only. Partners are the real acting forces behind the scene, So in legal perspective Partnership is not taken as Separate Business entity. Its functioning is based on these partners who have mutually agreed to carry on the business.

Partnership is a separate business entity but not Separate Legal Entity.