Some times two or more persons combine their resources and start a joint business. they share its risks & profits as well. so this association of persons in starting a business is called partnership. in partnership the business is managed suitably and different problems are solved in centralised way. therefore when two or more skillful persons join to share their ideas & experiences ultimately business become successful. the money invested in the business is called capital. in this sort of business the profit and loss is distributed among the partners in the ratio of their investments. partnership to manage business exits at every age. but in this era its importance is increased. it enables two persons or more with capital or resources to utilize it in best way to earn maximum revenue. partnership however exits in small to medium size business setups. retailing, fuel pumps, car maintenance centers, ink cartridge & stationary wholesaling are few examples. when the business expands to the limit that the available partners cant manage to handle the business or they face the problem of limited capital & rush of orders, the next step is to make it a public limited organization by issuing equity shares in stock market.

In pakistan there is no such strict compulsory necessity and eligibility for registration of business firm in term of partnership . any twenty or less persons start it. but however some rules regarding tax exists. legal regime for establishment and regulation of partnerships in Pakistan is stated in the Partnership Act, 1932 which defines partnership as “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.”