Overview
A partnership firm is a business structure where two or more individuals, known as partners, come together to jointly own and manage a business with the aim of earning profits. The partnership is governed by a partnership deed, which outlines the terms and conditions of the partnership, including profit-sharing arrangements, decision-making processes, and responsibilities of each partner. Partnerships can be formed with minimal legal formalities, making them a popular choice for small and medium-sized enterprises, professional services firms, and family-owned businesses. One of the key features of a partnership firm is the mutual agency, where each partner acts as an agent for the partnership and can legally bind the firm to contracts and agreements. Additionally, partners in a partnership firm share both the profits and losses of the business according to the terms outlined in the partnership deed. While partnerships offer flexibility and ease of formation, they also come with certain limitations, such as unlimited liability for the partners, meaning they are personally liable for the debts and obligations of the partnership. Despite this, partnerships remain a widely used business structure due to their simplicity, flexibility, and ability to foster collaboration and shared decision-making among partners.
Types of Partnership Firms









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