Question

What are the three essential elements necessary (but not necessarily sufficient) to form a partnership? How can they be made sufficient?

Answer 1

The most essential elements necessary to form a partnership are:

1. The contract in a partnership

2. Business to be carried on

3. Profit sharing in the partnership

The contract needs to be well documented and it is the most important reference which is used if there is any issue in the partnership that occurs. The contract requires stakeholders and there should be minimum 2 stakeholders to complete this deal and along with that there has to be a business contract that there will be business transactions in the partnership and the profit incurred needs to be shared on the basis of that. These shoudl be present to make the elements sufficient in a partnership.