Meaning and Definition of Partnership

A partnership is a form of business organisation that, unlike an HUF business, arises purely out of an agreement between its members. Section 4 of the Indian Partnership Act, 1932 — the statute that governs partnership firms across India, including Tamil Nadu — defines partnership as:

"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."

Persons who have entered into partnership with one another are individually called "partners" and collectively a "firm"; the name under which the business is carried on is called the "firm name." …