where is the pvp takes place? i mean factions vs factions.

Its more of a sandbox. You can create a group or faction and have other players join. Group leaders can charge taxes based on goods sold. I don't quite remember but I think you can set other players to enemy and it is recognised by the group.

So, the first part of pvp is to puchase a ship with weapon capabilty. The E10 would probably be the best choice. Then you have to puchase weapons if you vehicle doesn't come with them. Weapons can only be purchased/ mounted at Cutter's port (orbiting station). Finally all that is left is to piss off some other player and start shooting. Last I knew you could still repair anytime you want. So pvp is on the honor system.