What is a Partnership Firm and What are its compliances?

What is a Partnership Firm and What are its compliances?

Indian Partnership Act of 1932 prescribes the law relating to a partnership firm in India. Partnership Act lays down the rights and duties of the members/partners among themselves and other legal relations between partners and any third persons, which are incidental to forming a partnership.

Partnership

A partnership is a relationship between persons, agreed to share the profits of business activities carried on by all partners/members or any one of the partners/members acting for all. Therefore, a partnership firm contains three essential elements.

  1. A partnership firm must be a result of a legal agreement between two or more individuals.
  2. The agreement must be made to share the profits obtained from the business.
  3. The business must be run by all or any of them representing the rest.

All these conditions must coexist before a partnership can come into existence.