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Partnership firm
A partnership firm in India is a popular form of business organization where two or more individuals (known as partners) come together to carry on a business with a common goal of making a profit. The operations and responsibilities of the business are governed by a legal agreement known as the Partnership Deed
Documents required
- Pan card of partners
- Aadhar card of partners
- Business Address proof
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Because of lack of capital and limited managerial skills, sole proprietorship may not reach to a great height. The sole trader establishes his trade in the beginning as a single individual. When his business establishes, he appoints another person in order to increase the managerial capability. However, when sole proprietorship expands beyond limits at that time sole trader admits some outsider as a partner,, that time sole proprietorship comes to an end and new organization emerges is called as partnership firm.
In short the limitations of the sole proprietorship concern and to bring in more capital as well as managerial ability, two or more persons come together and contribute their resources as well as share in the profits. This creates an organization with more than one owner. This form of organization is called a partnership firm.
Merits
- Benefits of Partnership firm
- More Financial Resources
- More Manpower Resources
- Easy formation
- Simple Dissolution
- Rational Decisions
- Secrecy
- Personal Contacts
- Division of Risk
- Flexible organization
FAQs
What is Registration of partnership firm?
According to the Indian Partnership Act, 1932, it is not necessary to get the firm registered for its formation. Registration of a partnership firm is not compulsory under any law or no any penalty for non registration of partnership firm. But it is always useful to get the firm registered. In Maharashtra, registration of partnership firms is compulsory with the effect from 1st April .1985.
What is Procedure for Registration?
- An officer is appointed for a registration of a partnership firm is called Registrar of firms. The steps involved in the registration of a firm are given below.
- Obtain all prescribed forms from the office of the Registrar of firms of the area in which the place of business of the firm is situated. Then fill up the forms with the following information.
⦁The name of the firm.
⦁ principal place of the firm (Head Office).
⦁ Name of the other places where the firm has business (Branches)
⦁ The date when each partner joins the firm.
⦁ The name in full and addresses of the partners.
⦁ The duration of the firm (In case of partnership at will / for particular period). - Then get the statement fully signed by all partners and then this form along with the prescribed fee, has to be deposited in the office of Registrar.
- After proper scrutiny of the forms, if Registrar is satisfied, he enters the information in the register and sanctions it.
- Then Registrar issues a certificate which is called the Certificate of Registration.
What are the effects of non registration?
Under the Indian partnership Act, 1932, the registration of a firm is not compulsory. But an unregistered firm suffers the consequences. Following are the effects of non registration of partnership firm.
- A partner of an unregistered firm cannot file a suit against the firm or any other partner of the firm.
- An unregistered firm cannot file a suit against a third party to enforce any right arising from contract, but third party can file a suit in the court of law against the partnership firm.
- Firm also cannot start legal proceeding against any partner.
What is Partnership deed?
A deed of is a legal document signed by two or more partners who come together and decide to run a business for profit.
How much minimum capital is required
There is no restriction on minimum capital required to form a partnership firm.
What is partnership?
Partnership is the relation between the persons who have agreed to share the profits of a business carried on by all or any one of them acting for all.
What is the registration of a partnership?
Partnership registration means the registration of the partnership firm by its partners with the Registrar of Firms.
What is duration of partnership?
It depends upon the life of owner and his intention to continue his business.
Is the owner of the partnership and sole proprietorship are same?
Yes, both are same
What are the licenses required for proprietorship registration?
It depends upon state to state. In general GST registration and Udyam registration are required for proprietorship.