A partnership is defined under Section 2 of the Partnerships Act, 2010 as the relationship that exists among persons numbering between 2 and 20 who carry on a business together with the aim of making profits. A Partnership is different from a company because while a company is separate from its owners and can hold property and sue or be sued in its name, a partnership is not a legal entity of its own; partnership property is held by the partners exclusively for purposes of the business. Also, when a partner dies, the partnership is dissolved (unless the Partners agreed otherwise) which is not the case with a company.
There are two major types of partnership; a general partnership and a limited liability partnership. The limited liability partnership is more like a Limited Liability Company.
In the case of a Limited Liability Partnership, only one of the Partners is liable for the debts of the partnership. The rest of the partners are only liable to the extent of their capital contribution to the partnership. In General Partnership, however, all Partners are fully liable for the partnership’s debts.