Question

What is the meaning of legal status and perpetual succession of a partnership firm?

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.

Separate Legal Status- 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. unlike a company

Perpetual Succession- It means that business is legal entity it is created by the law and therefore death,physical ailment ,entry and exit of the owners does not affects it.it continues and only comes to an end after legal procedure known as winding up.