What is a Partnership Firm?
About Partnership Firm
Partnership Firm is a
conventional form of structure to do business jointly. when two or more than two people come together to do
business with joint ownership & management then it is termed as a partnership. Registration of partnership
business is highly recommended. It is suitable for small manufacturers, traders, service providers &
professionals. The Liabilities of partners is unlimited. Proworktree gets your Partnership firm registered in
Effective, Efficient and Economical way. This form of organization should have at least two people to
initialize the process of establishing a firm. Proworktree provides all the Partnership related services
Advantage of having Partnership Firm
Less Compliance : A partnership firm is only
required to follow compliance as per their tax & government registrations. So no separate annual filing in
any other form is required.
Easy to Get Started : PAN Card, Identity and
Address Proof of partners along with partnership deed are the documents required.
Inexpensive business start-up : It is an inexpensive type of
business. It requires a minimal amount to get started along with less compliance. etc.
Tax Benefits : Partnership firm enjoys tax
benefits when compared to other forms of businesses.
More details on Partnership Firm
Need to Form Partnership Firm
It is best for those who are planning to
start a small business. The cost incurred to set up this Firm is also minimal such that it can be started by
any person interested to do small business. Even there is no compulsion of having the registration done for
the Partnership Firm.
Number of Partners Required
To start a business under
Partnership firm it should have at least 2 members. However, a Firm engaged in banking business can have at
least 10 members and 20 members in case of any other business. The share of profit and loss can be divided
either in equal ratio or unequal ratio as decided at the time of starting the business.
Agreement Between the
In partnership Firm the is an
agreement called Partnership Deed in which there are certain essential things are mentioned like the rights,
the share of a particular partner in profit/loss, their duties, delegations, obligations are mentioned.
Partnership Deed can be written or oral,
but it is always said to have a written partnership deed so as to avoid conflicts that may arise between the
partners in the future.
Necessary or Not to Register The Firm
As per the Indian Partnership
Act 1932, Registration of the Partnership Firm is not necessary. However, there are certain rights or benefits
available for the registered firms which are not available for the unregistered firms. Moreover, a partner to
sue another partner of any firm, registration is required i.e. to sue others and get the suit to the court
registration should be done.
A legal business structure in which two or
more persons, run and manage a business according to their terms and goals. Compare to other business
structure, partnership registration is quite easy and most widely used for small and medium-sized business.
Proworktree provides all the partnership registration related services.
It is essential that all partners must
agree on a common firm name and then agree for a partnership agreement. In the document, all terms and
conditions should be mentioned, it valid on oral promises. The terms of partnership agreement may vary on
the requirement of partners mutual needs. This flexibility is mentioned in the partnership act, 1932. In
case of a partnership agreement, silent on any situation, in this provision of the act would
Why partnership Firm ?
- Registration of partnership is very easy.
- Expenses of partnership registration is very less compare to LLP.
- Required minimum compliance.
Ingredient of Partnership Firm
Features of Partnership
- There must be at least 2 partners in
- The liability of the members is
- There should be an agreement among the
partners to share profit and loss.
- Partners cannot transfer their share of
interest to others without the concern of other partners
- Every partner is an agent of the firm.
can act on behalf of the firm
- The business carried in Partnership
should always be Lawful.
Details Required in The Partnership Deed
- Address and name of all
the partners and firm
- Nature of
- Contribution by
- Profit/loss sharing
- Duties and obligations
- Rights of each partner
and also the special privilege enjoyed by active partner
- Salaries, commissions,
other amounts to be payable to him
List Of Documents Required
Documents Required for the
Registration of the Firm
- Application form for registration under
Partnership Act i.e. Form No. 1
- A copy of the original
Partnership Deed, which is signed by all the partners.
- Affidavit by the
Partners, declaring their intention to become a Partner.
- Address Proof and ID
proof of the Partners like Pan card/Aadhar card/copy of driving license/passport/voter id of
- Property or Premises on
which the business is set up its Property/Lease Agreement.
- If the property is rental
then its rental agreement is required and NOC from the landlord.
- If the Property is owned
by the partners then its electricity bill or any other address proof.