Question:

Write any two characteristics of partnership.

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Remember: partnership is formed by agreement and involves sharing of profits and responsibilities.
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Solution and Explanation

A partnership includes several important characteristics. First, it is formed by an agreement between two or more persons who agree to share profits and losses of a business. Second, partners contribute capital and participate in management according to the terms of the agreement. Third, the business is based on mutual trust and cooperation among partners. Fourth, liability of partners is generally unlimited, meaning partners are personally responsible for debts of the firm. Any two of these characteristics explain the essential nature of a partnership and show how partners work together to operate the business effectively.
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