A partnership is an arrangement or agreement in which parties, referred to as partners, agree to work to advance their mutual interests. In a partnership firm, partners may be individuals, companies, interest based organizations, schools, governments or any combination thereof, which work together to increase the likelihood of each achieving their mission and to increase their reach. All the conditions, rewards and risks can be compiled in a document called partnership deed.
In India, partnership is governed by Indian Partnership Act, 1932; however, registration under the Act is not mandatory. Partnership among the parties is regulated by Partnership agreement or deed, in the absence of which provisions of Partnership Act, 1932 come into force and few default provisions apply like All partners will divide profit and loss equally, if any partner gave loan to firm, partnership firm will give interest, no salary is given to any partners, no interest will be given on the capital etc. All the assets and liabilities are owned jointly by the partners as the partnership firm has no separate legal entity. Further, the liability of partners is not limited to the extent of their capital but it may extend to their personal assets also, i.e. there is unlimited liability of partners.
We help entrepreneurs to form partnership firm easily without any hassle, advising them to draft partnership deed properly and get government registration.
GST/ IEC or any other registration applicable and selected by the user.
Customized Partnership Deed.
Courier charges of sending the original certificate and Partnership deed at your address.
Any Government Fee or charges payable.
Application of PAN and or TAN.
Inspection fee payable at the time of visit to the officer if any.
Fresh application fee if registration applicable is rejected.
Identity and Address Proof of the Applicant partners.
Copy of PAN card of partners (for registration with govt. department)
Passport size Photographs of partners, Wherever required.
Any other documents according to selected registration.
2 day process for gathering the necessary details and documents
1 day process for preparing standard partnership deed, (customization depends upon the time taken by client)
7 days process of PAN application
1 day process for getting documents ready for submission to govt. after receipt of PAN.
2 day process for submitting application to government after signing and verification of all documents.
1 day process for providing certificate after approval from relevant department and updating its status.
A partnership firm is an arrangement where parties, referred to as partners, agree to cooperate to advance their mutual interests for earning profits. A partnership may contain individuals, businesses, schools, governments, interest-based organisations to achieve a common goal. All the conditions, rewards and risks can be compiled in a document called partnership deed.
A partnership firm can be registered or unregistered, registration of partnership firm under The Indian Partnership Act, 1932, is not mandatory. With the popularity of limited liability partnership firms in India, partnership firms are losing their relevance due to advantages associated with limited liability partnership firms combining advantages of partnership firm and company.
No, registration of partnership firm is not mandatory under Indian Partnership Act, 1932,.
No it is not mandatory to form partnership firm’s deed setting forth terms and conditions of partnership.
- All partners will divideprofit and loss
- If any partner gave loan to firm, partnership firm will give interest on that loan.
- No salary is given to any partner for participation in the work of partnership firm.
- No interest will be given on the capital of partners.
- Partnership firm will not take interest on his given amount in the form of drawing to any partner.
No for opening a bank account of Partnership Firm compliance to RBI Norms are mandatory, if the partnership deed is registered under the Indian Partnership Act, 1932, then current account can be opened with Bank. To know more about how to open bank account click here.
No, only applicable government registrations are mandatory for Partnership Firm like if sales/supply of services exceed specified limit of turnover then registration with Goods and Services Tax is mandatory. However as per RBI norms government proof of business is mandatory to open a current bank account, if the partnership firm is not registered under Indian Partnership Act, 1932, 1932, in that case registration with either Goods and Services Tax, Import Export Code, Shop and Establishment or other local commercial departments are required. To know about registration with government departments click here.
The maximum number of partners than can exist in partnership firm is 10 in case of firm carrying on banking business and in case of any other nature of business the limit is 20. However, this limit is governed by companies act and not the Indian Partnership Act, 1932.
- EASY FORMATION: To form Partnership Firm only partnership deed between partners is required.
- LARGER RESOURCES: Due the more number of members the partnership firm has larger resources for the business operations as compared to sole proprietorship.
- FLEXIBILITY IN OPERATION: 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
- BETTER MANAGEMENT: Business of a partnership firm is very well managed by all the partners as they take interest in the daily affairs of business because of the ownership, profit and control.
- SHARING OF RISK: In partnership every partner bears the risks individually as it is easier compared to sole proprietorship.
- PROTECTION AGAINST FRAUD: In a partnership firm interest of every partner is protected against any fraud.
- INSTABILITY: 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.
- UNLIMITED LIABILITY: Liability of every partner in a partnership firm is unlimited as any of the partners may be called upon to pay all the debts even from its personal properties. A single wrong decision by one partner can lead other partners in heavy losses and liabilities.
- LACK OF HARMONY: According partnership agreement every partner has equal rights. Some situations might occur in which one or the other partner will not agree on the same thing which will cause difference of opinion resulting mistrust and disharmony among the partners.
- LIMITED CAPITAL: Due to the restriction on the maximum number of members of 20, a limited amount of capital can be raised. However in case of private limited companies there is limit of 200 shareholders.
- NO LEGAL STATUS: A partnership firm does not have a legal status like a company or Limited liability partnership.
- TRANSFER OF OWNERSHIP: In a partnership firm it is not easy to transfer ownership. Consent of every partner is required in order to transfer ownership.
Yes, other partners with their consent surrender their part of shareholding in other person and can admit it as partner and thus invite investor’s money. Moreover secured and unsecured loan can also be obtained by the firm from investors on interest. Further bank loans can also be brought, however the bank a credit rating give more preferences to Companies and Limited liability partnership.