Partnership firm is a business structures where a formal agreement(called as partnership deed) between two or more people is made who agree to be the co-owners, distribute responsibilities for running an organization and share the income or losses that the business generates in accordance with the terms and objectives set out in the Partnership Deed. This form of business registration is best suited for those business looking to manage business within their limited reach and without much legal burdens.
In other words, Partnership firms are relatively easy to start and prevalent amongst small and medium-sized businesses in the unorganized sectors. In India, all the aspects and functions of the partnership are administered under ‘The Indian Partnership Act 1932’.A partnership firm can even be registered after it is formed. There are as such no penalties for non Registration of a Partnership firm. But unregistered Partnership firms are denied certain rights under section 69 of the Partnership Act that majorly deals with the effects of non Registration of Partnership firms.
The partnership firms registered under GST are required to file the GST return on a monthly, quarterly and annual basis. GST return is a document that contains the details of the income of the taxpayer. As filing of GST returns is mandatory for all the registered Taxpayers. Main returns to be filed are GSTR-3B (which is a monthly summary) and GSTR 1 (details of outward supplies).
Partnership Firm shall maintain proper books of accounts which shall represent an accurate and fair value of the state of affairs of the company. Accounting is necessary for the statutory audit. Annual filing and Income tax return filing which is mandatory.
Income tax filing must be filed by all partnership firms. The income tax return of a partnership firm that doesn’t need an audit is due on the 31st of July. If the income tax return of a partnership firm is to be audited according to the Income Tax Act, then the return would be unpaid on the 30th of September.
The Income Tax audit would be needed for a partnership firm if the total sales turnover is more than Rs.1 crore during the financial year. In case of a professional firm, the tax audit would be necessary if total gross receipts exceed Rs.50 lakhs throughout the financial year under assessment.
The failure to fulfill Partnership Compliance requirements levies a penalty. Hence,it is advisable to fulfill the requirements.
With our experienced and skilled personnel, We at UpriseLegal provides a comprehensive Partnership compliance service at a very affordable prices.We follow law to the core and uses our knowledge to avoid any hassles in your business so that you can rise and grow! You may get in touch with our compliance manager on 9173512402 or email us at [email protected] for free consultation