Partnership Summary

Partnership is formed when two or more people agree to share profits and manage a business together, as per the Indian Partnership Act, 1932.
It requires a legal agreement that outlines terms, profit-sharing, and responsibilities.
Partners have unlimited liability, meaning personal assets can be used to repay debts if business assets are insufficient.
Partners share risks, profits, and losses based on an agreed ratio.
Decisions are made collectively by all partners.
Partnership lacks continuity, as it may dissolve upon a partner's death, retirement, or insolvency, unless the remaining partners agree to continue.
A partnership requires a minimum of two partners, with a maximum of 50 partners under current rules.
Each partner acts as both an agent and a principal, representing the others and binding them through their actions.

Types of Partnerships

Partnership at will: Continues until a partner decides to leave.
Particular partnership: Formed for a specific project or time period, dissolves once completed.

General partnership: All partners have unlimited liability and participate in management.
Limited partnership: Some partners have limited liability, and they do not manage the firm. Registration is compulsory for limited partnerships.