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Partnership Firm

A business organization in which two or more individuals manage and operate the business. The owners of a partnership business are individually known as the “partners” and collectively as a “firm”.

A partnership is formed by an agreement: which may be either written or oral. When the written agreement is duly stamped and registered, it is known as “Partnership Deed”

Type of Partnership

  • Un-Registered Partnership
  • Registered Partnership
  • Limited Liability Partnership (LLP)

Registration Applicability

  • Un-Registered Partnership
  • Registered Partnership
  • Limited Liability Partnership (LLP)
  • Not compulsory to be registered
  • Registration with Registrar of Firm
  • Registration – Ministry of Corporate Affairs

Legal Provision Regulated & Controlled by

  • For Registered & Un-registered – Indian Partnership Act, 1932
  • For Limited Liability Partnership (LLP) – Ministry of Corporate Affairs

General Content of Partnership Deed

  • Name of the firm.
  • Nature of the business to be carried out.
  • Names of the partners & their Profit Sharing Ratio
  • The town and the place where business will be carried on.
  • The amount of capital to be contributed by each partner.
  • Loans and advances by partners and the interest payable on them.
  • A number of drawings by each partner and the rate of interest allowed thereon.
  • Duties and powers of each partner.
  • Any other terms and conditions to run the business.

Advantage of Partnership

  • Your business is easy to establish and start-up costs are low.
  • More capital is available for the business & greater borrowing capacity.
  • Less statutory compliances as compared to Private limited Companies.
  • Better decision making and control over the business.

Dis-Advantage of Partnership

  • Limitations to keep the firm in converting in a large business scale.
  • Unlimited liability. General partners are liable without limit for all debts contracted and errors made by the partnership.
  • Since decisions are collective, disagreements can occur.

Registration Process

Un-Registered Partnership

  • Draft Partnership Deed
  • Noterized the Deed
  • Obtain PAN
  • Obtain TAN
  • Open Bank Account
  • Start the Business

Registered Partnership

  • Draft Partnership Deed
  • Appear both partners & submit required documents with Registrar of Firm
  • Obtain Registration Certificate
  • Obtain PAN & TAN
  • Open Bank Account & Start the Business

Limited Liability Partnership (LLP)

  • Obtain DIN No. & DSC of all partners
  • Name Approval filed in Form-1 & Form-2 sent for MCA after approval
  • LLP Agreement (Partnership Deed) is drafted and filed along  with Form-3 within 30 Days.
  • Get the Incorporation Certificate.
  • Obtain PAN & TAN
  • Open Bank Account & Start