Definition and nature of partnership
The Partnership Act, 1932 was enacted by Parliament to regulate partnership firms in India. It is based on the English Partnership Act of 1890. It came into force on 1 October 1932. Previously, the law relating to Partnerships were contained in the Contract Act, 1872, in its Chapter XI, Sections 239-266, but the provisions were not found satisfactory and hence the Chapter was repealed and a new and separate Partnership Act was enacted. This Act extends to the whole of India except the State of Jammu and Kashmir.
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. This definition is contained in Section 4, Partnership Act, 1932 and states: