Partnership serves as an answer to the needs of greater capital investment, varied skills and sharing of risks. Partnership firm is ideal for small businesses that plan to remain small.
Price starts from ₹ 5999/-
Timeline – 15 Working days
What is a partnership firm?
Partnership is a common form of business. Two or more people come together to carry on a business and share the profits and losses. Liability of the partners in a partnership firm is joint and several.
A partnership firm is not a separate legal entity distinct from its memebers. It is merely a collective name given to the individuals composing it. Hence, unlike a company which has a separate legal entity distinct from its members, a firm cannot possess property or employ servants, neither it can be a debtor or a creditor. It cannot sue or be sued by others.
More about partnership Firm
- Partnerships are governed by Indian Partnership Act, 1932. Registration of a partnership is not mandatory under the Act, but registered partnerships get to enjoy some additional benefits such as the right to sue
- Terms with regard to profit sharing ratio, remuneration to partners, interest on capital etc are agreed upon by the partners in the partnership deed.
- Maximum no. of partners in a firm is 20 (10 in case of a firm carrying on banking business).
- All the partners must share the profits of a firm in whatever ratio as may be agreed upon by them. However, sharing of losses by all partners is not mandatory.
- Minors can be admitted as partners but to the benefit of the minor i.e., minor should not share the loss.
- Agreement between partners in a unregistered firm can be an oral agreement too.
What are Characteristics of Partnership Firm?
More resources can be procured from all the partners when compared to sole proprietorship.
The statement of accounts of the firm need not be published and this ensures secrecy.
Better management of business can be done as the number of persons managing the business are more.
Easy to form
A partnership firm is easy to form. An oral or written agreement between the partners is all that is needed to start a partnership.
Sharing of risk
Risk is shared amongst the partners.
Lead to dissolution
A partnership firm does not exist for an indefinite period of time. The death, insolvency or lunacy of a partner may lead to dissolution of the partnership firm.
Separate legal status
A partnership firm does not have a separate legal status i.e., a firm cannot own property.
Limited liability concept does not apply in case of a partnership firm. All the partners are jointly and severally liable for the liabilities of the firm.
Limited number of partners
Due to the limited number of partners there is flexibility in the operations of business as the partners can amend any objectives or change any operations any time by mutual consent.
Cannot access public funds
A partnership firm cannot invite funds from public.
What are the Documents required for Partnership Firm Registration?
Affidavit declaring intention to become partner
Copy of Aadhaar Card/ Voter identity card
Copy of PAN card of the partners
Form No. 1 (Application for registration under Partnership Act)
Rental or lease agreement of the property on which the business is set
What Includes in this package?
Verification of Documents
Preparation of Partnership Deed
Dealing with Respective Authorities
Following until Certificate is allotted
What is the Process for Partnership Firm Registration?
Draft a partnership deed
A deed of partnership is required to be made out and registered under the Indian movable property Act together with other movable properties involved.
Fill Form 1
This is the Prescribed Registration Form for Incorporation of a firm. It should be filled and along with documents to be submitted to ROF.
Submit the duly filled Form 1, stamped partnership deed and Lease agreement to RoF (Registrar of Firms)
Certificate of registration is issued by RoF
After verification of all Submitted documents, RoF will issue Certificate of Registration.