1. Minimum Number of Persons

A partnership firm must have at least two individuals to be legally valid.

• The Indian Partnership Act, 1932, mandates a minimum of two persons.
  
• A sole individual cannot form a partnership firm.
  
• These individuals must mutually agree to share profits.
  
• Each person becomes a partner in the business.
  
• Consent of all partners is essential for formation.

2. Maximum Limit of Partners

The maximum number of partners is defined based on the nature of the business.

• For general business, the maximum is twenty partners.
  
• For a banking business, the limit is ten partners.
  
• Exceeding these limits converts the firm into an illegal association.
  
• These limits are specified under the Companies Act, 2013.
  
• The firm must ensure compliance with the specified partner limit.

3. Eligibility of Individuals to Become Partners

Not all individuals are eligible to become partners in a partnership firm.

• Only persons competent to contract can become partners.
  
• They must be of sound mind and not disqualified by law.
  
• Individuals must be above the age of eighteen.
  
• Legal entities like companies can also become partners.
  
• A minor can only be admitted for the benefit of the partnership.

4. Role of Mutual Agreement

The formation of a partnership depends on a mutual agreement between persons.

• All persons must agree to the terms and conditions.
  
• The agreement may be oral or written.
  
• The agreement must include the number and names of partners.
  
• Each partner must willingly join the firm.
  
• The agreement becomes the foundation of the partnership.

5. Importance of Number in Legal Validity

The number of partners affects the legal recognition of the partnership.

• Having fewer than two partners ends the partnership.
  
• Increase beyond the legal limit invalidates the structure.
  
• A proper number ensures operational and legal compliance.
  
• It is essential for registration and legal documentation.
  
• Maintaining a valid partner count ensures smooth functioning.