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Partnership Firm in India
Partnership firm is one of the most popular forms of entity incorporation where two or more people form a business together and share the profits and losses. The partnership is not mandatory but it is highly risky and not recommended by the department and professional experts. This kind of business is most suitable for small and medium size businesses as it is easy and economical to manage. Read to know the benefits, process, documents required and fees of partnership firm .
What is a Partnership firm?
Partnership firm is a business entity registered under the Partnership Act, 1932 where two or more people join together as partners for running & managing a business while sharing the profits and losses in an agreed ratio. Partnership firms can only be registered when the partnership deed is signed and accepted by all the partners of the firm.
What is a Partnership deed?
Partnership deed is an agreement between the partners in which all the terms and conditions related to business are incorporated. Some of the major terms and conditions mentioned in the deed of a partnership are
- Details of the firm and partners
- Profit and Loss sharing ratio among the partners
- Nature, commencement and duration of partnership firm
- Salary and commision of partners
- Interest on capital and loan
- Provisions related to capital introduction and capital withdrawal
- Accounting and Auditing
- Banking and Voting rights
- Conditions for admission, resignation and retirement of partners
Benefits of Proprietorship Firm
Minimal Compliances
Cost Effective
Easy to Start and Exit
Minimum requirements for Partnership
Minimum two partners
Partners should be the citizens of India
Address proof of business office
Time required for Partnership Firm
On average, it takes around 10-14 working days for of partnership firm in India subject to document verification by the concerned authorities.
F.A.Q.
It takes around 10-14 working days to register a partnership.
A partnership could be registered by registering a partnership agreement or deed where all the terms and conditions would be incorporated.
Yes, you can be cancelled. You’ll have to dissolute the firm for cancellation of partnership .
As per the Partnership Act, 1932, it is required to submit a copy of PAN card of all partners and address proof of office for partnership .
Note: You can use your residential address as address proof of office.
Basically there are two types of partnership deeds – one is registered and the other one is not registered. Registered partnership is incorporated from the office of registrar where no notarisation is required. In case of unregistered partnership, notary is mandatory.