A partnership firm is a legal entity formed when two or more individuals come together and start a company based on a partnership deed. In such a business structure, all the partners share the profits or losses incurred by the business as per a preset ratio. The registration of partnership firms comes under Section 4 of the Indian Partnership Act. However, this Act also makes it clear that the registration of partnership firms is not mandatory in India. To function as a partnership firm, the partners must register a Partnership Deed but have the option to leave their company unregistered, though that is not advised. The registration of partnership firms may be done by approaching the Registrar of Firms.