partnership-firm

Partnership Firm

Posted by CA Pankaj Kumar Vats
In: Business
On 17 Apr 2024

Contents Covered

  • Introduction to Partnership Firm Registration
  • Understanding Partnership Firm
  • Legal Requirements for Partnership Firm Registration
  • Document Requirement for Registration
  • Step-by-Step Guide to Registering a Partnership Firm

1. Introduction to Partnership Firm:

A partnership is an arrangement between two or more people to oversee business operations and share its profits and losses. In a general partnership firm, all members share both profits and losses.

2. Understanding Partnership Firm:

Advantages

Advantages of a partnership include that:

  • Two heads (or more) are better than one.
  • Your business is easy to establish and start-up costs are low.
  • More capital is available for the business.
  • The partners in a partnership firm get the benefit from risk sharing, unlike an individual in a proprietary firm whose liability can be unlimited
  • The most important benefit that arises from the registration is that when there are disputes between or among the partners, a partner can sue the other partners
  • Registration also enables the Partnership firm to sue third parties to enforce its claim
  • The dissolution procedure for a registered Partnership firm is reliable and quick

Disadvantages

The most common sources of difficulties for business partners are disagreements over equality within the firm, in areas such as power, equity and workload. It’s important to find solutions to any business partner problems to allow your firm to perform at its best.

3. Legal Requirements for Partnership Firm Registration:

A minimum of two persons are required to establish a partnership firm. A partnership firm is where two or more persons come together to establish a business and divide its profits amongst themselves in the agreed ratio.

4. Document Requirement for Registration:

  1. Pan card of Partners
  2. Aadhar card  of Partners
  3. Electricity bill
  4. Name of the Firm
  5. Objetives of the firm
  6. Profit sharing ratio
  7. Capital contribution
  8. Address proof of partnership firm (NOC from owner if property is rented)

5. Step-by-Step Guide to Registering a Partnership Firm:

Step 1: Arrange documents

Step 2: Draft a Partnership Deed

Step 3:  Pay the Fees & Stamp duties

Step 4: Apply for a PAN Card in the Partnership Name

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