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Partnership Concern

A partnership firm is a form of business which is established among individuals generally called partners under a contract of partnership. Minimum no. of partners required to form a partnership is 2 and no maximum limits as per Indian Partnership Act, 1932 but Companies Act, 2013 describes limitation on maximum no. of partners in case of banking business-10 and in case of any other business-20.

Advantages of Partnership Concern:

Easy Formation

  • Registration is not compulsory in the case of Partnership firm. It can be formed without any legal formality and expenses. Thus they are simple and economical to form and operate.

Larger Resources

  • Due the more number of members the partnership firm has larger resources for the business operations as compared to sole proprietorship.

Flexibility in operation

  • 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.

Better Management

  • Business of a partnership firm is very well managed by all the partners as they take interest in the daily affairs of business because of the ownership, profit and control.

Sharing of Risk

  • In partnership every partner bears the risks individually as it is easier compared to sole proprietorship.

Interest

  • In a partnership firm interest of every partner is protected against any fraud.

FAQ on Partnership Concern:

What is the difference between partnership concern and limited liability partnership?

  • Partnership concern is govern by Indian Partnership Act, 1932. The liabilities of the partners are not limited and each of the partners is personally liable for all the debts incurred, actions and obligations of the business and also of other partners. However, LLP is governed by Limited Liability Partnership Act, 2008 and the liability of members is limited to the extent of capital contribution of the firm.

Does a partnership firm need to be registered?

  • Yes, it needs to get registered.

What is a partnership agreement?

  • Although a Partnership Agreement is not mandatory for General Partnerships, it is generally recommended that the partners negotiate and draft a partnership agreement. Partnership agreements clearly define the roles and responsibilities of all the partners toward one another and in relation to third parties. Keep in mind that a partnership needs to be re-established if one of the partners should die. In the face of such events and other unforeseen circumstances, the best intentions of the partners may not be enough to keep the business operating. A sound Partnership Agreement will anticipate most scenarios and provide all the partners with viable plans and procedures for handling them.

What are documents required for registration of partnership concern?

  • ID Proof –(Voter ID/Aadhar/Passport) – any 1
  • Address Proof (Electricity Bill/Telephone Bill/Bank Statement)-Any 1
  • Partnership Agreement filed by us.

I am not a Citizen of India. Can I become a partner in an Indian firm?

  • The Partnership Act does not prohibit a non-citizen from joining an Indian Partnership firm, subject to necessary clearances and permissions from statutory authorities in this regard.

What is the capital of partnership firm?

  • There is no such minimum requirement of capital to start a partnership concern. It is not even necessary for each partner to contribute equally. Contribution is based on mutual agreement between partners.

Who can be partners?

  • Partners must be above 18, should be sane and should not be disqualified by law from entering into any contract.

Can a minor admitted to the benefits of partnership, become a partner on attaining majority?

  • A minor admitted to the benefits of partnership, has the option to become a partner within 6 months of attaining majority. He has to give a public notice stating his acceptance or rejection of partnership. In the absence of notice, it is considered that he has become a partner of the firm.

Can a partner transfer his right in the business of the firm to an outsider?

  • Yes, it can transfer his interest to the outsider, but only with the consent of all the partners.

Can a new partner be admitted to partnership firm?

  • 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 partner nominate a successor?

  • 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.

How can partnership firm is dissolved?

  • A partnership firm can be dissolved in any of the following ways:
  1. By agreement
  2. By compulsory dissolution
  3. On the happenings of certain events

partnership concern

Partnership Concern

(*Excluding government fees)

Ideal for unorganized sector with low setup cost and minimum compliance

2,489.00

  • PAN

    • 110

    TAN

    • 150

    Partnership Agreement

    • 600

    Partnership Concern’s Stamp

    • 250

    DSC/director

    • 850
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