A Partnership Firm is a business structure where two or more individuals come together to operate a business and share its profits and losses. Partners contribute capital, skills, or resources and collectively manage the business according to the terms outlined in a partnership agreement. This agreement defines each partner’s roles, responsibilities, and profit-sharing ratios. While partnerships offer ease of formation and shared decision-making, partners are personally liable for the firm’s debts and obligations. This structure is well-suited for small to medium-sized businesses where trust and collaboration between partners are essential for success.