A partnership is a single business in which two or more people share ownership.
The partnership form emerged from the capital and managerial limitations of sole proprietor firm.
The reasons for the emergence of partnership firm are as follows:
1. An individual has sufficient funds but does not have the required skill.
2. An individual has the required skills but lacks sufficient funds.
3. To distribute business risk.
To run a business at a large scale and to expand it, more people, additional capital, skill and managerial ability are required. In such circumstances, more than one person gather to supplement each other and commence a business. Such a form of business organisation means a partnership firm.