What is a Partnership Firm? A Beginner's Guide
A partnership firm is one of the most common business structures in India, especially for small and medium-sized enterprises. It is a business entity formed when two or more individuals come together to operate a business and share profits in an agreed-upon ratio. Governed by the Indian Partnership Act, 1932 , a partnership firm is a flexible and straightforward way to start a business, making it a popular choice among entrepreneurs in Rajasthan and across India. Key Features of a Partnership Firm Minimum Two Partners: A partnership firm requires at least two individuals to form a business. The maximum number of partners allowed is 50 as per the Companies Act, 2013. Partnership Deed: A written agreement, known as a partnership deed , is drafted to outline the rights, responsibilities, profit-sharing ratio, and other terms between the partners. Profit and Loss Sharing: All partners share the profits and losses based on the agreement specified in the partnership deed. Unlimited Liab...