Formation: A partnership firm is formed through an agreement known as the Partnership Deed. The Partnership Deed outlines the terms and conditions of the partnership, including the name of the firm, details of partners, profit-sharing ratio, capital contribution, roles and responsibilities of partners, and more. The partnership deed can be oral or written, although it is advisable to have a written agreement.

Partnership Name: The partnership firm can operate under any name chosen by the partners, provided it does not infringe on any existing trademarks or violate any naming guidelines.

Number of Partners: A partnership firm in India can have a minimum of two partners and a maximum of 20 partners. However, in the case of banking business, the maximum number of partners can be 10.

Liability: In a partnership firm, the partners have unlimited liability, which means they are personally liable for the debts and obligations of the firm. This liability is shared among the partners based on the agreed profit-sharing ratio mentioned in the Partnership Deed.

Registration: Partnership firm registration in India is optional, as it can operate without registration. However, it is recommended to register the partnership firm with the Registrar of Firms in the respective state where the firm operates. Registration provides legal recognition and certain benefits, such as the ability to sue or be sued by third parties.

Taxation: A partnership firm is not a separate legal entity for tax purposes. The profits of the partnership firm are taxed in the hands of the partners as per the applicable tax slab rates. The partnership firm needs to obtain a PAN (Permanent Account Number) and file income tax returns.

Decision-making: In a partnership firm, decision-making is typically based on the mutual agreement of the partners, as specified in the Partnership Deed. Each partner has the right to participate in the management and decision-making process of the firm unless otherwise specified in the agreement.

Dissolution: A partnership firm can be dissolved by mutual consent of the partners or as per the terms specified in the Partnership Deed. Upon dissolution, the firm’s assets and liabilities are settled, and the remaining funds are distributed among the partners as per the agreed profit-sharing ratio.

It is advisable to consult with a professional, such as a chartered accountant or a lawyer, to understand the specific legal and regulatory requirements related to partnership firms in India and to ensure compliance with applicable laws and regulations.