At least two persons are required.
Maximum limit on the number of persons is 10 for banking business and 20 for other businesses.
Persons who have agreed to join hands must be competent to contract.
Minors, lunatics and insolvent persons are not eligible to become the partners.
Two or more persons share the income of jointly owned property.
Business of which the persons have agreed to share the profit must be lawful.
Every partner is the principal as well as the agent of the firm.
Partners of the firm have unlimited liability.
Liability of a minor partner is limited to the extent of his share in the profits.
Registration of partnership firm is not compulsory. But an unregistered firm suffers from some limitations.
Easy to form
Availability of larger resources
Sharing of risks
Benefits of specialisation
Protection of interest
Non-transferability of share
Possibility of conflicts
Business activities like construction, providing legal services, medical services etc.
Suitable where capital requirement is of a medium size.
Business like a wholesale trade, professional services, mercantile houses and small manufacturing units can be successfully run by partnership firms.