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Partnership is a voluntary association of two or more persons who agree to carry on some business jointly and share its profits and losses.

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There must be at least two persons to form a partnership. The maximum no. of persons is 10 in banking business and 20 in non-banking business.
2. Agreement:
It is an outcome of an agreement among partners which may be oral or in writing.
3. Lawful business :
It can be formed only for the purpose of carrying on some lawful business.
4. Decision making & control
Every partner has a right to participate in management & decision making of the organisations.
5. Unlimited liability
Partners have unlimited liability.
6. Mutual Agency
Every partner is an implied agent of the other partners and of the firm. Every partner is liable for acts performed by other partners on behalf of the firm.
7. Lack of continuity
Firms existence is affected by the death, Lunacy and insolvency of any of its partner. It suffers from lack of continuity.

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It can be easily formed. Only an agreement among the partners is required.

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There are more funds as capital is contributed by no. of partners.

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As decisions are taken jointly by partners after consulting each other.

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In it, risk gets distributed among partners which reduces anxiety, burden and stress on the individual partner.

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Secrecy can be easily maintained about business affairs as they are not required to publish their accounts or to file any report to the govt.

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There is a restriction on the number of partners and hence capital contributed by them is also limited.

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The liability of partners is unlimited and they are liable individually as well as jointly. It may prove to be a big drawback for those partners who have greater personal wealth. They will have to repay the entire debt in case the other partners are unable to do so.

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A minor is a person who has not attained the age of 18 years. Since a minor is not capable of enlarging into a valid agreement. He cannot become a partner of the firm. However, a minor can be admitted to the benefits of an existing partnership firm with the mutual consent of all other partners.

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Such a partner takes active part in the management of the firm.

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Such a partner only gives his name and goodwill to the firm. He neither invests money nor takes profit. But his liability is unlimited.

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He participates in business secretly without disclosing his association with the firm to the general public. His liability is also unlimited.

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He does not take active part in the management of the firm. Though he invested money, shares profit & Loss and unlimited liability.

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He is the one who by his words or conduct gives the impression to the outside world that he is a partner of the firm whereas actually he is not. His liability is unlimited towards the third party who has entered into dealing with the firm on the basis of his pretensions.

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He is the one who is falsely declared partner of the firm whereas actually he is not. And even after becoming aware of it, he-does not deny it. His liability is unlimited towards the party who has deal with the firm on the basis of this declaration.

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The written agreement on a stamped paper which specifies the terms and conditions of partnership is called the partnership deed.

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It generally includes the following aspects

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It generally includes the following aspects

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• Name of the firm

• Location / Address of the firm

• Duration of business.

• Investment made by each partner.

• Profit sharing ratio of the partner

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A partner of an unregistered firm cannot file suit against the firm or the partner.
The firm cannot file a suit against a third party.
The firm cannot file a case against its partner