CHAPTER II 



FORM OF ORGANIZATION 



The simplest and oldest form of business ownership is that 

 by the individual. As long as one person owns and operates a 

 business, its organization is very simple. All business transac- 

 tions with this individually owned concern will be directly with 

 the owner or his agent. Should this person, however, take one 

 or more partners, then an organization known as a copartner- 

 ship is formed. 



COPARTNERSHIP 



A partnership is an association founded upon a contract be- 

 tween two or more competent persons for joining their money, 

 goods, labor, and skill, or any or all of these, for the purpose of 

 carrying on a legal trade or business, with the understanding 

 that_there shall be a communion of profit among such partners. 



Partnerships are of two kinds — general and limited. A gen- 

 eral partnership is the most common form and is an association 

 of two or more parties who agree to enter into a specified busi- 

 ness without fixing limitations. A limited partnership is an 

 association of parties for some of whom liability is limited. 

 This latter form of partnership is allowed in some states, but is 

 rarely organized, and is now largely supplanted by the corpora- 

 tion. A limited partnership is usually required to file in some 

 public office a certificate showing its membership, the purpose 

 for which organized, its total capital, its assets, and the number 

 of shares held by special partners. 



How a Partnership is Formed. — A partnership may be 

 formed by a written agreement. Such an agreement should 

 specify the names and duties of each partner, the purpose for 

 which the partnership is created, the amount of money invested 

 by each, how the partners will share in profits and losses, form 



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