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Partnership, according to the Indian Partnership Act, 1932, is ‘the relation between persons who have agreed to share profits of the business carried on by all or any of them acting for all’. It is agreement between two or more persons who have decided to commence a business with an intention to make and share profits. The agreement can be oral or written and as per the partnership act the business is carried jointly by all partners o one partner acting for all.

The objective of any partnership is to make and share profits. The maximum number of partners is 10 for a banking business and 20 for other businesses. For a partnership to be successful there should be an agreement to share both profits and losses. A partner doing a business should be understood by every other partner and each partner will be held responsible for every other partner’s act. The name under which the partnership business is carried is called firm name. No partner holds the right to sell the share of partnership to an outsider without the consent of other partners.
Partnerships are of two types – registered and un-registered. Though the registration of a partnership is not mandatory, it is better to register for further advantages in future.

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