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Partnership firms in India are governed by the Indian Partnership Act, 1932. Partnership firms are relatively easy to start, is prevalent amongst small and medium sized businesses in the unorganized sectors. Partnership firm can be started with a minimum of two members and a maximum of ten persons for banking business and twenty for non-banking business . Partnership firms are created by drafting a Partnership deed amongst the Partners, while it is not compulsory to register your partnership firm as there are no penalties for non-registration, it is advisable to register a Partnership firm due to the added advantages.

A partnership firm can be registered whether at the time of its formation or even subsequently. Like proprietorship, each partner has unlimited liability in the firm. With the introduction of Limited Liability Partnerships in India, Partnership Firms are fast losing their prevalence due to the added advantages offered by a Limited Liability Partnership.

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