In India, partnership organization is formed and managed by Indian Partnership Act, 1932.

Section 4 of Partnership Act defines partnership as the relation between persons who have agreed to share profits of a business carried on by all or any of them acting for all.

Minimum Requirement:- Minimum of 2 persons are required to form a partnership and maximum of 10 persons in case of banking and 20 in case of others

Features of Partnership

The relation of partners is based on the contract.
At least 2 persons are required for the formation of partnership firm
There must be some undertaking of business.
The objective must be to earn profits and share among partners.
Law of agency applies
Partner's liability is unlimited.
Mutual trust and confidence is the basis of partnership.
Every partner can be a principal or agent of other partners during the course of Business.
Consensus i.e. mutual consent is required for all important decisions.
Restriction on transfer of share.
No relation between contribution of capital and share of profits.
Life span of partnership depends upon the will of partners.

Benefits of Partnership

Formation of partnership is easy as it does not involve too many legal formalities.
Flexibility in the operations of the business.
Registration of partnership form of organization is not compulsory as in the case of company.
All major decisions are taken by mutual trust, which results in better decision making.
Sharing of risk helps in formation of capital.
Relation of effort and reward.
Unlimited liability helps in more credit worthiness.
It protects the interest of minority as mutual consent i.e. consensus is required to take all the major decisions.
Easy to maintain secrecy as partnership firm is not under an obligation to disclose its annual accounts.
No legal formalities for dissolution.

Limitations of Partnership

Unlimited liability increases the risk; this hinders the growth of business.
Limited resources for generating capital.
No perpetual succession i.e. sudden death or retirement of any one of the partners dissolves the partnership.
Lack of good faith and confidence among partners causes great limitations.
No transfer of shares.
Burden of law of agency.
Due to non-disclosure of accounts there is always a lack of public confidence

Suitability

For service industry:- Accounting, Medical, Legal, Transportation, Warehousing etc.
Medium enterprises for distribution of profits.

Partnership - Key Requirement

Partners
Capital Contribution
Registered Office
Partnership Deed

Registration Flowchart

Pooling of partners IDEA
Business selection
Mutual understanding on conditions of agreement
Preparation of Partnership Deed
Partnership deed on Stamp paper and Drafting it
Signature of partners on Deed and submitting it to "Registrar of Firms" along with registration form
Commence Business get subsequent registrations