Partnership Firm
A partnership firm is an organization which is formed with two or more persons to run a business with a view to earn profit.
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A partnership firm is an organization which is formed with two or more persons to run a business with a view to earn profit.
| Swift |
Professional |
| Precise |
One Stop |
A partnership is an association of two or more people (Max limit up to 10), who agree to carry on the business together by combining their financial funds and managerial abilities and skills and share its profits and losses. A Partnership firm is a legal establishment registered by executing a partnership deed. Even though this form of business is governed under the Indian Partnership Act 1932, the partners are at free will to decide on various terms pertaining to share of profits/salaries and other related matters. It has less legal regulation as compared to Pvt Ltd Company or Limited liability partnership. In India normally all partnership firms are general partnerships.
At Super CA, we are always there to assist you in preparing or drafting your partnership deed at your terms and conditions. Our team comprises drafting experts, legal advisors, professional CAs and CSs who hold rich understanding in their particular field. We are currently growing with our community of clients day-by-day. To learn more about hassle-free partnership company registration kindly reach out to us.
PARTNERSHIP FIRM
IT INCLUDES CHARGES OF DRAFTING/ DEED MAKING, NOTARY CHARGES
₹2000 PLUS GST
*Stamp paper charges applicable as per the state.
PARTNERSHIP FIRM
PAN CARD
GST REGISTRATION
IT INCLUDES CHARGES OF DRAFTING/ DEED MAKING, NOTARY CHARGES, APPLICATION OF PAN CARD AND GST CERTIFICATE
₹3500 PLUS GST
*Stamp paper charges applicable as per the state.
1. Number of Partners:
Minimum number of people required to start a partnership firm is two and maximum limit is 10 in case of banking business and 20 in case of all other types of business.
2. Contractual relationship:
A written agreement known as partnership deed which is signed by all the partners, binds them in a contractual relationship. The partnership is governed by the Indian Partnership Act, 1932 where the deed governs the operation, management and decision-making methodologies and other activities
3. Voluntary Registration:
Registration of partnership firms is not mandatory by law. It is entirely up to the partners and business owners to make this decision.
4. Competence of Partners:
Every partner must be competent enough to enter into the partnership agreement. He should not be a minor, or of unsound mind or insolvent.
5. Sharing of Profit and Loss:
In partnership firms all the profits and losses are shared by the partners in any ratio as agreed. If it is not given then they share it equally.
6. Unlimited Liability:
Liability of partners of a partnership firm is unlimited. They are jointly held liable for the debts and losses of the firm.
7. Legal Status:
Partnership firms have no distinct legal status separate from their partners.
8. Perpetual succession:
Partnership Firm does not have perpetual succession
9. Property Purchase :
A partnership firm cannot purchase movable/immovable property in its name. It must be purchased in the name of partners
10. Partners’ Dependency:
In a Partnership firm, the resignation or death of any of the partners would have a huge impact and the Partnership would stand dissolved & have to be reconstituted
It is very easy to form. Simple agreement needs to be executed.
There is also flexibility of changes in partnership firm as easy as in proprietorship firm. Such changes cannot be implemented in a company with ease because of the restrictions imposed.
Sharing of risk is also very important feature of such type of formed firm. Since Profit or Loss of said firm is shared by partners, which ultimately brings less burden of loss/ expenses on each individual.
There is no statutory obligation on the part of partnership firms to disclose financials to public as in company. Thus, it is more secretive.
In partnership firm, various people are part of one firm, which means various minds are working for one oriented goal. Which enhances the possibility to achieve goal efficiently and effectively with in desired time?
In partnership firm, various people are part of one firm, which means various minds are working for one oriented goal. Which enhances the possibility to achieve goal efficiently and effectively with in desired time?
It consist various people, who can have different skill and expertise, which can be useful for business.
There is also very less burden of statutory compliance as compared to company. Therefore, it is also very economic.
Partnership firms can be dissolved by agreement, mutual consent, insolvency, certain contingencies, and by court order. The dissolution procedure for a registered Partnership firm is reliable and quick.
➤ Proof of Identity
All the partners are required to provide their valid PAN & Aadhar details while applying.
➤ Photographs
All partners must provide copies of their passport-sized photographs. While there is no strict specification regarding the size and resolution of the image, it is preferred that the photograph have a white background.
➤ Registered Office Proof
A proof must be provided to ensure the registered office address of the Partnership. Any utility service like telephone, gas, electricity, etc. depicting the address of the premises in the name of the partner or document, which must not be older than two months at the least can act as Proof of evidence If the registered office is rented, the rent agreement and a NOC from the landlord has to be submitted. This acts as an authorization from the Landlord to use the premises by the company as its registered office.
The most used partnership types are General Partnership and Limited Liability Partnership (LLP). Both the structures are a similar form of entities but they differ due to the way of functioning and their terms and conditions and many more. Both entities are governed under different regulations by the government, they both enjoy different types of liabilities, advantages/disadvantages and freedom in their domain. Hence, you should have a clarity on the kind of business you are into, your goals and objectives before choosing one.
| Parameter | |||
|---|---|---|---|
| Number of Partners | A General Partnership firm can have two or more members with a maximum limit of 10 whereas a Limited Liability Partnership must be registered under the Act with a minimum of two partners. There is no limit on the maximum number of partners in LLPs. Both LLP and partnership firms must have a minimum of 2 partners. If the number of partners reduces below 2 in a partnership firm due to any reason the firm would stand dissolved. But, in case of LLPs if the number of partners reduces below 2, the sole partner can find a new partner without actually dissolving the firm. | ||
| Legal Status | Partnership firms have no distinct legal status separate from its partners whereas a LLP is a body corporate having a separate legal entity and has perpetual succession. | ||
| Compliance | For LLPs, it is mandatory to file the annual return to the Ministry of Corporate Affairs (MCA) and the ROC annually in the prescribed format . Whereas, a partnership firm requires no annual return filing. | ||
| Transferability | Shares can be transferred to another person after obtaining the permission of all the Partners in a Partnership. The transferability of a Partnership is unwieldy, whereas the shares of an LLP can be transferred. However, the transferee is not allowed to become a Partner automatically. The share of an LLP can be transferred to another person more easily. | ||
| Perpetual succession | Partnership Firm does not have perpetual succession whereas LLP has perpetual succession. | ||
| Property Purchase | A partnership firm cannot purchase movable/immovable property in its name. It must be purchased in the name of partners. On the contrary, LLP can purchase movable / immovable property in its name | ||
| Audit of accounts | Partnership firms are only required to have tax audit of their accounts as per the provisions of the Income Tax Act In LLP, if the firm’s turnover does not go beyond, in any financial year, Rs. 40 lacs, or whose turnover does not go beyond Rs.25 lakhs is not obliged to get its accounts audited. Except all LLPs are required to get their accounts audited annually as per the provisions of LLP Act 2008. | ||
| Agreement between Partners. | The partnership is governed by the Indian Partnership Act, 1932 where Partnership Deed governs the operation, management and decision-making methodologies and other activities. Whereas, Limited Liability Partnership Act, 2008 governs LLP in India. The operation, management and other activities of the LLP are accordance to the LLP Agreement | ||
| Manageability | Partnership firms are difficult to operate or move across India because the Registrar of firms that register the partnership firms are controlled by the state government. But, in case of LLPs, they can open a bank account and shift their registered office anywhere in India and as it is registered under the MCA. | ||
| Partners’ Dependency | In a Partnership firm, the resignation or death of any of the partners would have a huge impact and the Partnership would stand dissolved & have to be reconstituted whereas in LLP, the subsistence is not dependent on its partners. The changing of partners of the LLP will not affect the existence or operations of the firm. | ||
| Dissolution | Partnership firms can be dissolved by agreement, mutual consent, insolvency, certain contingencies, and by court order. On the other hand LLP can be dissolved voluntarily or by order of the National Company Law Tribunal. | ||
