1. Number of members: The minimum member of persons required for a partnership is two (2). Maximum number is ten (10) in case of banking business and twenty (20) in other partnerships.
2. Business Purpose: The purpose of forming a partnership should be to carry out some business. The business must not be illegal.
3. Agreement: For the formation of a partnership an agreement is must. The agreement may be oral or written. Only competent persons can enter into a partnership agreement.
4. Profit sharing: The profits and losses of a partnership business must be shared among the partners. Prots must be shared in an agreed ratio or equally.
5. Mutual agency: Mutual agency is there in partnership. Every partner is an agent and a principal at a time. He is an agent when he acts for others and a principal when the others act for him.
6. Unlimited liability: The liability of the partners . in a firm is unlimited. Every partner is individually and jointly liable for all the debts of the rm.
7. No legal existence: A partnership has no legal existence. It has no existence different from its members.
8. No transfer of share: A partner cannot transfer his share in the firm to outsiders without the consent of the other partners.
