“Partnership” is the relation between persons who have agreed to share the profits of a business carried on by all or any of them acting for all.
Pre-requisites of Partnership:
1. Object of profit: A partnership must be formed for a business objective with aim of profit. It cannot be formed for a charitable purpose.
2. Requirement of members (individual): At least two person shall come together for partnership. There are different types of partners in the firm.
3. Agency between partners: A partner is considered acting for all other partners based on relation of agency.
4. Agreement between Partners: An oral or written agreement (preferable for businesses entities) is required for establishment of partnership firm. The written agreement is called Partnership Deed.