The Indian Partnership Act 1932 is a comprehensive legislation that governs the formation, functioning and dissolution of partnership firms in India. The Act provides the legal framework within which two or more persons can join together to carry on a business with the objective of earning profit. One of the most important features of the Act is that it defines partnership as 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 makes it clear that agreement, profit motive and mutual agency are the essential elements of a partnership. Another salient feature of the Partnership Act 1932 is that a partnership firm has no separate legal existence apart from its partners. Unlike a company or a cooperative society, the partnership firm is not treated as an independent legal person. The rights and liabilities of the firm are actually the rights and liabilities of the individual partners. This characteristic makes the partners personally responsible for all the acts and obligations of the firm. The principle of unlimited liability applies to partnership firms, which means that if the assets of the firm are insufficient