A business owned and run by the partnership of two or more individuals is a General Partnership. In this type of business structure, there is a Partnership Deed, which underlines the terms and objectives of the business. This type of business is gaining popularity in recent times because of its ease of set up and comparatively lower set-up costs. Registration is not mandatory for this type of business structure. The profits and liabilities of the business are shared by individual partners in a decided ratio. General Partnership has unlimited liability.
In a General Partnership, there is a minimum of two partners. A banking business partnership can have a maximum of 10 partners, and other business partnerships can have a maximum of 20 partners.
Many small businesses opt for General Partnership since it is inexpensive and easy to set up. However larger businesses usually opt for Limited Liability Partnership (LLP).
A partnership firm can be unregistered or registered. However, a registered partnership firm has the following advantages:
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