A Partnership Firm is a business structure where two or more persons or an association of people own, manage & operate a business in accordance with the terms and objectives stated in the Partnership Deed. It is thought to have lost its relevance since the introduction of the Limited Liability Partnership (LLP) because in partnership, the partners are liable for the debts of the business due to unlimited liability. However, being inexpensive, the ease of setting up and fewer compliance formalities make it a practical option for some.
A partnership firm is considered ideal for micro and small scale business which have multiple promoters.
Also, General Partnerships can be either registered or unregistered. Though it is not mandatory to register a Partnership firm, it is preferred to register a Partnership firm due to the added benefits.
The registration of the partnership firm is not mandatory, hence making it easy to start business as there are no legal formalities involved.
The appointment of an auditor or if the partnership firm is unregistered, filing annual accounts with the registrar is not required.
A partnership firm is less inexpensive to start unlike LLP, and even in the long run, due to the lesser compliance requirements, is inexpensive
A Partnership firm need not file its annual accounts with the Registrar of Companies unlike a LLP or a Company each financial year.
A private limited partnership offers legal protection to its shareholders but restricts its ownership. It is relatively convenient to manage and run the company with a possibility of expansion for growing companies. Also, it is easy to dissolve and wind up the company.
* Form No. 1 (Application for registration of the firm under The Indian Partnership Act)
* Original copy of Partnership Deed, duly signed by all concerned partners.
* Affidavit declaring intention to become a partner.
* Rental or lease agreement of the property on which the business is set up.
The registration of a partnership firm can be done before its commencement or during its continuance. An application should be filed with the Registrar of Firms of the area in which the concerned business is situated
1. Application for partnership registration includes the following:
Name of the firm.
Name of the place where business is carried.
Names of any other place where business is carried on.
Date of partners joining the partnership firm.
Full name and permanent address of partners.
Duration of the firm.