Partnership firm| deed| how to apply| Registration Services
partnership firm refers to a business structure in which two or more individuals register and operate a business according to the terms and conditions which are set in partnership deed. Partnerships are based on the partnership deed, which can be in written and oral form and it contains all the rules and regulations regarding the partnership firm. Partnership deeds are created on the judicial stamp paper of 2000 rupees to avoid future conflicts. Under the Partnership Act, 1932, partnership firms are registered with prior rules and regulations which must be mentioned in partnership deed
- The agreed name of the partnership firm, it should be based on mutual agreement of all the partners.
- The nature of the business must be mentioned in partnership deed.
- The duration of the partnership
- Contribution of capital by all the partners
- In partnership firm all the partners share the profit of firm. So profit sharing ratio should all be decided.
- Procedure for voluntary or forced dissolution of the firm
- Guidelines for solving any disputes and arbitration process to be followed
Flexibility in incorporation
The registration of partnership firm registration is rather simple. The rules and regulations partnership firm registration are less strict as compared to other firm registration. The process is flexible if the partners have pre-mediated agreements and concessions.
In partnership firm generating profit is the responsibility of all the partners. So they all work accordingly with a collective responsibility. And also all the partners have equally contribute in the decision making of the firm.
Limited tax liability
Partnership firms have very low tax liabilities. The tax compliance are also very limited in partnership firm.
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What is the registration fee for partnership firm registration?
There are no statutory or government fees required to be paid for registering of partnership, except the professional fees and stamp duties:
- An affidavit from each partner on a stamp paper of Rs. 10 each stating their intention to be part of the partnership firm
- Court Fees Stamp of Rs. 3 for application form
- Registration and documentation charges need to be paid to get the document registered with sub-registrar (about Rs. 1100)
Documents required for partnership firm registration
- PAN Card of all the partners
- ID Proof
- Scanned passport size photo of the director
- Bank statement of all partners
- Rent Agreement/ NOC if property is one rent
- Registered office proof
- Partnership deed
- An Affidavit declaring the intention to be part of the partnership
What is a partnership?
A partnership is a type of entity in which two or more persons come forward to start a business. The business thus formed can be carried by one or all the partners.
Is written agreement necessary in the partnership?
No! A written agreement is not mandatory in a partnership. However, it is generally a good idea to have a written agreement rather than an oral one to avoid disputes later on
How are partnerships taxed?
A partnership does not pay any income taxes, although it may be required to file a tax return. Instead, partnership income “passes through” the business to the partners. Each partner than reports his or her share of business profits or losses on an individual federal tax return.
How can I enforce the agreement?
The agreements can be enforced through courts and tribunals.
Can a foreign resident be a partner in a firm?
Yes! A foreign resident can be a partner in the firm. The Indian does not restrict a foreign resident to be a partner of the firm.
What is partnership at will?
In the case, if a partnership deed does not provide for duration or for dissolving the partnership in any manner, it is a partnership at will.
Can a partner transfer his/her rights to an outsider?
Yes, a partner can transfer his or her rights to an outsider with the consent of other partners.
Can a partner nominate a successor?
Yes, a partner can nominate a successor to take his place in the event of death or retirement of the partner. The mode of introducing a new partner or successor is based on provisions in the partnership deed. A new partnership deed is required once the new partner is admitted into the firm.
Can a firm become a partner in another firm?
A partnership cannot become a partner of another firm because it is not a legal person. However, the partners may be partners in another firm in their individual capacity.
How can we dissolve a partnership?
- By agreement
- By compulsory dissolution
- On the happening of certain events which may result in disputes.