Ideal for Small or Medium Sized Businesses.
Starting at :₹3999 (all inclusive)
A Partnership is defined by the Indian Partnership Act, 1932, as ‘the relation between persons who have agreed to share profits of the business carried on by all or any of them acting for all’. This definition gives three minimum requirements to constitute a partnership firm, viz. (1) there must be an agreement entered into orally or in writing by the persons who desire to form a partnership (2) the object of the agreement must be to share the profits of business intended to be carried on by the partnership, and (3) the business must be carried on by all the partners or by any of them acting for all of them.
A partnership firm is best for small businesses that plan to remain small. Low costs, ease of setting up and minimal compliance requirements make it a sensible option for such businesses. Registration is optional for General Partnerships.However for larger businesses, it has lost its relevance with the introduction of the Limited Liability Partnership (LLP). This is because an LLP retains the low costs of a partnership while providing the benefit of limited liability, which means that partners are not personally liable for the debts of the business.
The partners in a partnership firm are the owners, and thus, are not separate entity from the firm. Any legal issues or debt incurred by the firm is the responsibility of its owners, the partners. A partnership must have at least two partners. A partnership firm in the banking business can have up to 10 partners, while those engaged in any other business can have maximum 20 partners.
A partnership is easy to form as no cumbersome legal formalities are involved. 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" which may be registered or not registered. Ordinarily, the rights, duties and liabilities of partners are laid down in the deed. But in the case where the deed does not specify the rights and obligations, the provisions of The Indian Partnership Act, 1932 will apply.
|BETTER DECISION MAKING||Partners share the decision making and can help each other out when they need to. More partners means more brains that can be picked for business ideas and for the solving of problems that the business encounters.|
|GREATER FLEXIBILITY||Due to the limited number of partners, there is flexibility in the operations of business as the partners can amend any objectives or change any operations any time by mutual consent.|
|SHARED RESPONSIBILITY||Partners can share the responsibility of the running of the business. This will allow them to make the most of their abilities. Rather than splitting the management and taking an equal share of each business task, they might well split the work according to their skills and the risk is also shared among partners.|
|EASE OF FORMATION||A Partnership is easy to form as no cumbersome legal formalities are involved Registration is not compulsory in the case of Partnership firm. It can be formed without any legal formality and expenses. Thus, it is simple and economical to form and operate.|
|MINIMAL COMPLIANCES||General Partnerships do not need to appoint an auditor or, if unregistered, even file annual accounts with the registrar. Annual compliances are also fewer as compared to an LLP. General Partnerships do need to file Income Taxes and, depending on turnover, service and sales tax.|
|RELATIVELY INEXPENSIVE||A General Partnership is cheaper to start than an LLP and even over the long-term, thanks to the minimal compliance requirements, is inexpensive.|
A Legal Suvidha Financial Expert will first understand your business, Partners, Partnership structure and other relevant details to draft a Partnership Deed that is acceptable to all Partners.
ID and Address Proof of Partners like Pan Card/Passport/Voter ID/Aadhar Card/Driving License Copy of the Partners.
If Property on Rented : Rent Agreement and NOC from Landlord.
if Property is own :Need Electricity Bills or any other Address Proof.
Affidavit declaring intention to become partner
|Private Limited Company||Limited Liability Partnership||One Person Company||Partnership Firm|
|Preferred for||Start-ups||Professional Services Firms||Sole Proprietors||Small-medium sized businesses|
|Limited Liabilty Protection||Yes||Yes||Yes||No|
|Minimum Requirement||2 Shareholders||2 Designated Partners||1 Director
|Fund Raising Options||High||Low||Low||Low|
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