Partnership

A Partnership Firm is a popular form of business constitution for businesses that are owned, managed and controlled by an Association of People for profit. Partnership firms are relatively easy to start and prevalent amongst small and medium sized businesses in the unorganized sectors. With the introduction of Limited Liability Partnerships in India, Partnership Firms are fast losing their prevalence due to the added advantages offered by a Limited Liability Partnership.

There are two types of Partnership firms, registered and un-registered Partnership firm. It is not compulsory to register a Partnership firm; however, it is advisable to register a Partnership firm due to the added advantages. Partnership firms are created by drafting a Partnership deed amongst the Partners.

Advantage of partnership firm

Easy Formation : Formation of Partnership Firm is easy and not much legal formalities are involved in formation. Registration of Partnership Firm is not compulsory. So a Partnership Firm can start its business immediately after entering into Partnership Deed. However, registration of a Partnership Firm is always advisable as there are many add on benefits given to a Registered Partnership firm.

Name Selection : Name of a Partnership Firm is not registered. Partners are free to select any name of their choice for the firm. However, partners should be always be very careful make sure that the chosen name does not infringe any trademark or copyright of third person. It is also advised to get trademark of the name chosen for a Partnership Firm, otherwise some other person may also use the same name for his company.

No Annual Returns : The Registrar of Firms does not require the Partnership Firms to file Annual Returns like the Ministry of Corporate Affairs in case of Companies or Limited Liability Partnerships. As the annual compliances are lesser, it reduces efforts and cost for the Partnership Firm.

No Statutory Audit : A Partnership Firm is not required to file Audited financial statements with the Registrar of Firms. Therefore a Partnership Firm is not required to get its books of accounts audited. However, it might be necessary as per the provisions of Income Tax Act, to do Tax Audit if turnover exceeds prescribed limits.

Compliances and Regulations : The annual and event based compliances and regulations to run business are considerably less in case of a Partnership Firm as compared to Company of LLP.

Winding up : Winding up of a Partnership Firm can be done by simply entering into a dissolution deed. There are very less legal processes for winding up a Partnership Firm as compared to a Company.

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.

Partnership Process

Steps Taken to Register a Partnership Firm

• Choose Partnership Firm Name.
• Create Partnership Agreement or Deed with the help of efilingworld Professionals.
• Apply for PAN Card on the name of Partnership Firm.
• Opening of Current Bank Account on the basis of PAN Card and Registered Partnership Deed.

Documents Requirements :

• ID and Address Proof of Partners like Pan Card/Passport/Voter ID/Aadhar Card/Driving License Copy of the Partners.
• One Business Place Address proof :-

1. if Property on Rented :- Need Rent Agreement and NOC from Landlord.
2. if Property is own :- Need Electricity Bills or any other Address Proof.

Note :  Business place and home place can be same of the Partners.

Package Pricing for Partnership Firm@ 2499/- INR

• Drafting of the Partnership Deed by Legal Experts
• Apply for the Pan and Tan on the Firm Name.

Note :- Printing of the Deed on Stamp Paper and Notarization Services not included in the above package.