A Partnership Firm is not generally recognized as a separate legal entity, apart from the legal identity of the owners or partners. Hence, the Partnership Firm is deprived of the benefits of limited liability that Partnership Firm or limited companies avail.
The significant Acts pertinent for Partnership Firm are the Indian Partnership Act, 1932 and the Shops and Establishments Act of the State. Formation of the firm, demands at least two promising partners. By the Section 4 of the Indian Companies Act of 1956, maximum number of them should be constrained to 20.