The characteristics of partnerships include:
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Voluntary Association: Partnerships are formed by the consent of two or more individuals, rather than being a legal entity in and of themselves. This means that each partner is responsible for their partner's business actions within the scope of the partnership, and also has unlimited liability for the debts of the partnership.
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Limited Life: Partnerships are dissolved when a new partner is admitted, or when a partner withdraws, retires, dies, or becomes bankrupt. In these cases, the remaining partners must sign a new contract to continue the business.
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Unlimited Liability: Each partner is liable for all the debts of the partnership, and creditors can seize their personal assets to satisfy their claims. This means that the personal property of the partners may have to be sold to fully settle the partnership's debts.
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Mutual Agency: Each partner is an agent of the partnership within the scope of the business, meaning that their actions are binding on the remaining partners.
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Profit Sharing: Partners share profits and losses according to the terms of their partnership agreement. This may involve distributing profits and losses equally, or using a different ratio based on the contribution of each partner to the business.
