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 Act considers both registered and unregistered firms as valid and recognized. Registration of the partnership firm is not compulsory.
Partners often prefer to register their firms because a registered firm enjoys certain advantages. Registration of partnership firms is done with the Registrar of Firm (ROF) that has authority over the firm’s place of business. A registration fee is also needed for registration. The fee varies from state to state. It is better to register your business to avoid any problem in the future,
This type of firm is formed following an agreement made by the partners. The activities of the business are according to the agreement between the partners. In such a firm, the partners can run the business as per the terms stated in the agreement.
1. Aadhar Card and PAN Card of all partners
2. Address Proof of all the Partners - Bank statement/Electricity Bill/Telephone Bill -not older than 1.5 months
3. Address Proof of the premises - Electricity Bill/Property Tax bill - not older than 1.5 months
4..Passport size photos of the Partners
1. A Partnership firm must have a registered office in India. Documents like bank statement or electricity bill should be recent.
2. A utility bill, rent agreement or sale deed and an NOC (Non-Objection Certificate) from the landlord with his / her consent to use the office as a registered office of a partnership firm must be submitted as well.
1. Experienced and dedicated personnel assigned for engagement.
2. Collection of required documents along with a simple checklist.
3. Verification of the Documents as required for forming partnership firm by our experts.
4. Drafting and execution of partnership deed by our Assigned Personnel and will be sent to the partners for obtaining the signature.
5. It is to be noted that all partners must sign the documents on stamp paper, and a copy of the same should be sent back to us.
6. Obtaining PAN and TAN.
There are various reasons why one should form a partnership firm. Here are some of them:
In a Partnership firm, decision-making is faster as there is no concept such as passing the resolution.The Partners of Partnership firms in India enjoy a range of powers as they can undertake any business on behalf of the Partner's consent.
Partnership Firm is very easy to form. It comes into existence merely by a Partnership Deed. Its registration is not mandatory. Even after formation, there are no annual filings to be done except Income tax returns.
Unlike sole proprietor where every contribution is made by one person, in partnership, partners of the firm can contribute more capital and other resources as required.
On account of its very nature, Partnership firm enables sharing of risks by more than 1 person as the profit and losses are shared by all the partners. This ensures diversified financial risks.
The partnership firm has the advantage of knowledge, skill, experience and talents of different partners.
There are no restrictions as such with respect to the minimum capital requirement in case of partnership firm. The Partnership firm can be registered even with Rs. 10,000 as total capital.
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.
With our experienced and skilled personnel, We at UpriseLegal makes process of forming your partnership firm very smooth and helps you in each and every stepat a very affordable prices. You don’t have to worry on how to form a partnership firm as UpriseLegal is there to provide all the assistance that you need. A dedicated personnel will understand your business requirements and help you start a Partnership firm by drafting the Partnership deed.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.