PARTNERSHIP can be defined as the relationship which exists between two or more persons who are carrying on business in common with a view to making a profit. The rules governing the conduct of a partnership business are contained in the document known as the Deed of Partnership or Articles of Partnership or Partnership Agreement.

PROFIT AND LOSS APPROPRIATION ACCOUNT OF A PARTNERSHIPThis, as the name implies, is the account where either the profit or loss of the partnership business is shared between or among the partners as stipulated in the partnership agreement. The profit and loss appropriation account marks the beginning of the difference between the final accounts of a sole trader and that of a partnership. This is because while the sole trader does not share his profit with anybody, the profit of the partnership must be shared by the partners.

ADMISSION OF NEW PARTNERSThis occurs when a new partner is admitted into an existing partnership business. The reasons for such admission usually are: the expiration of an old partnership agreement, to inject in more funds, bringing in a specialist, the death of an old partner, etc.However, it will be unfair to the existing partners for a new person to come in and take part in the established prosperous business without any reward to the old partners. This compensation to the old partners is goodwill.

Meaning: To dissolve a partnership means to bring an existing partnership business to an end. This entails selling the assets of the business, paying its creditors and other liabilities and sharing the balance of cash left between or among the partners in the agreed ratio. Reasons for DissolutionAny of the following reasons can lead to the dissolution of a partnership.

A Company is a business owned, managed, controlled and financed by an association of people who possess legal entities with the usual motive of maximizing owners’ wealth.

Format of Trading Profit & Loss accountTrading Profit & Loss account for the year ended 31/12/9xOpening Stock x Stock xAdd purchases x Less return inward xLess return outward x x Gross loss x

Definition of sharesShares can be defined as units of the capital of ownership of a limited company. It is an ownership right in a company. A company cannot commence business until it raises capital by selling shares to the public for subscription.