Partnership is a business structure in which two or more business partners operates and manages a business as per the rules and regulation set in partnership deed. This is mainly formed among small and medium sized enterprises for which partnership registration is very easy and simple. Partnership deed is established with the agreement of all the partners with their own rights and obligation they want to initiate in their business. The terms and conditions can be made contrasting to the Indian Partnership Act, 1932 but if the Partnership Deed is quiet on any clause, then the provisions of the Act would apply.
In this registration, partners have unlimited liability and share responsibilities and liabilities with each other as per their deed. Cost effective, easily settled and with minimum requirement of agreement makes it easy and simplest especially for smaller and medium sized entity. Profits and losses from the business easily divide between the partners. Though, registration is not mandatory. However, in order to take any legal action, the partnership must be registered in the partnership deed. The deed contains the name, address, partnership name, starting date of business, terms and regulation (If any), investment, liability and share of each partner in case of profit and loss.