The procedural formalities are few and simple, and a partnership can be stated instantaneously. Even an oral Partnership is valid, though it has several shortcomings. A Partnership need not be registered, though registration is highly recommended, as the unregistered Partnerships suffer from many lacunae. A major shortcoming of this form of organization is the unlimited liability of partners, that is to say, the partners and their estate are liable for the liabilities constituted by the firm if the properties of the firm are insufficient to meet them. However in practice, this clause does not have much significance, unless the venture is very risky.
Registration is very cheap.
Stamp duty varies from State to State. Typically, a firm may be started at total charges of Rs. The biggest advantage is the flexibility of operations. The deed can be amended and modified very easily. Income Tax Act recognizes a firm as a separate tax entity.