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Partnership Firm Registration
A partnership firm is a business structure in which two or more individuals manage and operate a business in accordance with the terms and objectives set out in a Partnership Deed that may or may not be registered. In such a business, the members are individually partners and share the liabilities as well as profits of the firm in a predetermined ratio.
A partnership firm in India is governed by The Partnership Act, 1932. Two or more people can enter into an agreement with a deed of partnership and form a Partnership firm subject to maximum of 20 partners. A partnership firm can be registered with Registrar of Firms (ROF). Though registration is not mandatory, it provides some legal protection to partners in case they have differences between them.
Partnership Registration is necessary for any association of people to join for a business purpose and continue with legal bindings,sharing their profits according to law. We are giving the best services for Partnership Registration in Bangalore. We prepare Partnership Deed with the help of professionals according to the requirement of the customer and register the Partnership Firm with Registrar of Firms on behalf of the customer.
Partnership and Proprietorship are the 2 most popular forms of business organisations in India. The reason why these 2 forms of organisations are so popular is because they are relatively easy to set-up and the no. of statutory compliance required to be done by these forms of organisations is relatively less than the statutory compliance applicable to LLP's and Companies.
How to create a Partnership Deed?
The document in which the respective rights and obligations of the members of a partnership is written is called the Partnership Deed.
A partnership deed agreement may be written or oral. However, practically oral agreement does not have any value for tax purposes and therefore the partnership agreement should be written. The following are the essential characteristics of a partnership deed:-
1. Name and Address of the firm as well as all the partners
2. Nature of business to be carried on
3. Date of Commencement of business
4. Duration of Partnership (whether for a fixed period/project)
5. Capital contribution by each partner
6. Profit sharing ratio among the partners
The above are the minimum essentials which are required in all partnership deeds. The partners may also mention any additional clauses. Some of the examples of additional clauses which may be mentioned in the partnership deed are mentioned below:-
1. Interest on Partner's Capital, Partners' Loan, and Interest, if any, to be charged on drawings.
2. Salaries, Commissions etc, if any, payable to partners
3. Method of preparing accounts and arrangement for audit
4. Division of task and responsibility i.e. the duties, powers and obligations of all the partners.
5. Rules to be followed in case of retirement, death and admission of a partner.
ADVANTAGES OF PARTNERSHIP REGISTRATION
Easy to Start: A Partnership is easy to form as no cumbersome legal formalities are involved. Its registration is also not essential. However, if the firm is not registered, it will be deprived of certain legal benefits. The Registrar of Firms is responsible for registering partnership firms.
Business Name: Since the name of a Partnership firm is not registered, a Partnership firm can choose to have any name - as long as it does not infringe on a registered trademark. However, since the name is not registered, any other person can also use the same business name unless trademark registration is obtained.
Annual Filing NOT Required: A Partnership firm is not required to file its annual accounts with the Registrar each year unlike a Limited Liability Partnership or Company. Limited Liability Partnership's and Company's are required to file their annual accounts with Registrar of Companies each year.
Documents Required for Partnership Registration
1. Form No. 1 (Application for registration under Partnership Act)
2. Original copy of Partnership Deed, signed by all partners
3. Affidavit declaring intention to become partner
4. Rental or lease agreement of the property/campus on which the business is set