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A partnership is defined as a relationship between two or more individuals in which they agree to operate as a joint business and share the risks and rewards. A partnership must comply with the Partnership Act of 1932 here in Pakistan and the Partnership Act of 1890 in United Kingdom and if there is a limited partner then the Limited Partnership Act of 1907 is also relevant for United Kingdom.

Accounting for partnerships

A partnership is defined as a relationship between two or more individuals in which they agree to operate as a joint business and share the risks and rewards. A partnership must comply with the Partnership Act of 1932 in Pakistan and the Partnership Act of 1890 in Britain and if there is a limited partner then the Limited Partnership Act of 1907 is also relevant for Britain.

When a partnership is established the partners will usually draw up a partnership agreement. The Partnership Act does not specify the content of a partnership agreement but it might include:

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