Partnership Firm Registration
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Partnership Firm Registration
The term partnership means an association of two or more people as partners. “Partnership” is a form of business which involves sharing of the rights to own, manage and control business among two or more persons.
Requirements of Partnership Firm registration
- Minimum 2 people having a business idea
- No minimum capital
- Unique name for the Firm
Advantages & Benefits
- Effective Decision Making: Having partners in a business mean putting more brains which brings out a unique perspective in solving a business problem or picking a business idea which can be effectively implemented.
- More Financial Resources: Since there is more than one owner in a partnership firm, the partnership firm has access to more financial resources. A partnership firm can raise more capital as there are more than one owner.
- Easy In Formation: A partnership firm registration process is very easy to form. No formal documents are required to be prepared. All that is required is an agreement among the partners.
- Sharing Of Risks: Risk does not fall on one individual’s but shared by partners on a predetermined basis.
- Easy Accessibility To Profits: As the business profits are shared between the partners in a partnership, it can directly flow through the personal tax returns of the partners instead of initially being retained within the partnership.
- Flexibility Of Operations: It is free from legal restrictions and government control. Partners make changes in the size of business, capital and managerial structure without any approval.
- Unlimited Liability: The liability of a partners of the firm is unlimited, joint and several.
- Drafting of Partnership Deed
- Registration certificate
- PAN Registration of the Partnership Firm
- PAN Card of partners
- ID & Address Proof of Partners: PAN Card, Passport, Driver’s License, Aadhar Card, Voters ID
- Business Proof: Sale deed in case one of the Partner owns the place of business, Rental agreement of registered office, Copy of latest electricity bill or water bill or property tax receipt
Partnership firms are taxed at flat rate of 30% as per the Income tax Act, 1961
The Partnership Act provides that both registered and unregistered partnerships are valid and recognized by law. Partnership registration is not compulsory but is beneficial due to effects of non-registration. Mostly, the businesses at initial level prefer unregistered partnership till they reach stable level. The unregistered partnership can be registered at any time after its formation.
No, it is not necessary. As the contract act does not makes it necessary to have the agreement in writing. However, it is always prudent to make a partnership deed to produce to the bank, income tax authorities and to clients with whom the partnership firm deals with. Apart from serving as a reference document a written partnership deed also helps in reducing conflict and confusion in due course of time.
Yes, you can convert. We can help in setting up a new private limited company and then arrange an agreement between the partnership and private limited company.
Only Indian resident person is allowed for the partnership firm. If you have any foreign partner then you can go with Private Limited company only.
There is no such capital mandated by law. You should decide your requirement and invest capital accordingly.
It is not necessary for Partnerships to prepare audited financial statements each year. However, a tax audit may be necessary based on turnover and another criterion as governed by the Income tax Act, 1961
To open a bank account for a Partnership firm, a registered Partnership deed along with identity and address proof of the Partners need to be provided.
In the absence of a written agreement, partnerships end when one partner gives notice of his express will to leave the partnership. If you don't want your partnership to end so easily, you can have a written agreement that outlines the process through which the partnership will dissolve.
If the address proof e.g., electricity bill is in the name of another person, then NOC from the owner is required stating that they don’t have any objection on commercial activity