Partnership refers to a form of business organization where two or more individuals come together to carry on a business with a view of making a profit. It is governed by the Indian Partnership Act of 1932. Partnerships are a popular choice for small and medium-sized businesses due to their simplicity, flexibility, and the ability to pool resources and expertise.

Features of a Partnership Firm:

1. Agreement: A partnership is based on an agreement between the partners, which can be oral or written. The agreement outlines the terms and conditions of the partnership, including the capital contribution, profit sharing ratio, decision-making process, etc. It is essential to have a clear and comprehensive agreement to avoid any disputes or misunderstandings in the future.

2. Number of Partners: A partnership must have a minimum of two partners, with a maximum limit of 20 partners in the case of a partnership firm and 10 partners for a banking business. However, certain professions, such as chartered accountants and company secretaries, have a lower limit for partnership.

3. Unlimited Liability: One of the significant features of a partnership is the unlimited liability of the partners. Each partner is personally and jointly liable for the debts and obligations of the firm. This means that if the firm's assets are insufficient to cover the liabilities, the personal assets of the partners can be used to satisfy the debts.

4. Profit Sharing: The partners agree on the profit sharing ratio, which determines how the profits and losses of the firm will be distributed among them. The ratio can be based on the capital contribution, efforts, or any other mutually agreed basis. However, in the absence of an agreement, profits and losses are shared equally among the partners.

5. Management and Decision Making: Partnerships allow for shared management and decision-making. Each partner has the right to participate in the management of the firm and has an equal say in decision-making. However, the partnership agreement may assign specific roles and responsibilities to each partner based on their expertise and capabilities.

6. Continuity: Unlike a sole proprietorship, a partnership does not have perpetual existence. The partnership may come to an end upon the death, retirement, or insolvency of a partner. However, the partnership can be continued with the remaining partners by reconstituting the firm or through a new agreement.

7. Flexibility and Privacy: Partnership firms enjoy flexibility in terms of decision-making, operations, and taxation. They are not required to publish their financial statements or disclose their affairs to the public, unlike companies. This offers a certain level of privacy to the partners.

In conclusion, a partnership is a type of business organization that offers flexibility, shared management, and unlimited liability. It requires an agreement between the partners, and the profit sharing ratio determines how profits and losses are distributed. However, it is crucial to have a clear and comprehensive partnership agreement to avoid any conflicts or legal issues in the future.