A partnership firm is a type of business structure where two or more individuals (called partners) come together to jointly own and manage a business for profit. Partnership firms are governed by the Indian Partnership Act, 1932. Here are some key characteristics and aspects of partnership firms:

Formation: A partnership firm can be formed by an agreement between two or more persons to carry on a business together. The agreement can be oral or written, though a written agreement is preferable to avoid disputes.

Number of Partners: A partnership firm must have at least two partners. However, the maximum number of partners in a firm is typically capped at 20 for non-banking businesses and 10 for banking businesses.

Ownership and Management: In a partnership firm, all partners share the ownership of the business and participate in its management. Each partner contributes capital, skills, or labor to the firm and shares in the profits and losses according to the terms of the partnership agreement.

Unlimited Liability: One significant characteristic of a partnership firm is that the partners have unlimited liability. This means that each partner is personally liable for the debts, obligations, and liabilities of the firm. If the assets of the firm are not sufficient to cover its debts, creditors can go after the personal assets of the partners to settle the liabilities.

Mutual Agency: Each partner in a partnership firm acts as an agent of the firm and the other partners. This means that partners can bind the firm to contracts and obligations through their actions within the scope of the firm's business.

Transfer of Ownership: Unlike companies, ownership interests in a partnership firm are not freely transferable. If a partner wishes to leave the firm or transfer their share, they must do so with the consent of the other partners as per the terms of the partnership agreement.

Taxation: Partnership firms are not taxed as separate legal entities. Instead, the profits of the firm are allocated to the partners, who are then individually taxed on their share of the profits. The firm itself is not subject to income tax.

Registration: While it is not mandatory to register a partnership firm, it is advisable to do so. Registered partnership firms enjoy certain legal benefits, such as the ability to file suits against third parties and other partners and to claim set-off in a dispute.