Partnership firms in India are governed by the Indian Partnership Act, 1932. A Partnership Firm is Owned, managed by an partners. Partnership firms are comparatively easy to start are is prevalent among-est small and medium sized businesses in the unorganized sectors. Since two or more partners join hands to start a partnership business, it may be possible to pool together more resources as compared to a Sole Proprietorship. The partners can contribute more capital, more effort and more time for the business.
Partnership” is the relation between persons who have agreed to share the profits of a business carried on by all or any of them acting for all. Persons who have entered into Partnership with one another are called individually, “partners” and collectively “a firm”, and the name under which their business is carried on is called the “firm-name”.