Legal Definition of a Partnership
The fundamental legal requirement of a partnership is the presence of at least two competent partners.

• A partnership requires a minimum of two individuals
  
• If one partner exits, retires, or dies, the firm stands dissolved by law
  
• A single individual cannot form or continue a partnership firm
  
• The business can still continue, but not under the same legal identity
  
• This rule applies even if the remaining partner intends to bring in someone new later
  

Consequences of Falling Below Minimum Partners
If the number of partners falls below two, the firm is dissolved by operation of law, not by decision or notice.

• All ongoing contracts and obligations must be wound up
  
• The remaining partner may settle accounts or convert the business structure
  
• Legal liabilities of the firm may still need to be discharged
  
• Regulatory licenses, registrations (like GST, PAN), and bank accounts become invalid
  
• The business cannot operate as a partnership until a new partner joins
  

Temporary Continuation in Practice (Not Legally Valid)
In reality, some firms may try to continue operations temporarily, hoping to induct a new partner soon, but this is not legally recognized.

• Business continuity without a legal structure creates compliance risks
  
• Authorities may reject filings or licenses issued in the firm’s name
  
• Banks may freeze accounts upon learning the firm has only one partner
  
• Legal action against the firm could extend personally to the remaining partner
  
• Insurance and financial contracts may become unenforceable
  

Options for the Remaining Partner
If only one partner remains, they must either reconstitute the firm or change the business structure entirely.

• Add a new partner through a reconstitution deed and notify the Registrar
  
• Convert the business into a proprietorship with a new registration
  
• Alternatively, form a Limited Liability Partnership (LLP) or a Private Limited Company
  
• Ensure legal continuity by updating PAN, GST, and business licenses accordingly
  
• Notify banks and stakeholders about the structural change
  

Precautions and Legal Best Practices
Firms should plan for such situations by including protective clauses in the partnership deed.

• Include clear provisions for death, retirement, or exit of a partner
  
• Specify timelines and conditions for admitting a new partner
  
• Appoint an executor or nominee in case of a sudden exit
  
• Maintain proper documentation for a smooth transition or conversion
  
• File a public notice of dissolution or reconstitution as required under law