Partnership Firm
What is Partnership Firm?
Partnership is a relation between persons who have agreed to share the profits of a business carried on by all or any of them acting for all. Partnership firm is not a separate legal entity distinct from its members. It is merely a collective name given to the individuals composing it. Since a partnership firm does not have a separate legal entity so it cannot posses property, or employ servants in its name, nor it can be a debtor or a creditor. It cannot sue or be sued by others.
Partnership Firm is regulated by Partnership Act, 1932. A partnership firm can have minimum of 2 Partners and maximum of 100 Partners.
Types of Partnership
1. Partnership-At-Will - Where no provision is made by contract between the partners for the duration of their partnership, or for the determination of their partnership, the partnership is "partnership-at-will".2. Particular Partnership-A person may become a partner with another person in particular adventures or undertakings.
Advantages of Partnership
• Easy Formation: Like sole proprietorship, partnership form of organisation can be formed without legal formalities. No formal documents are required to be prepared as required in the case of companies. An agreement which may be oral or written is sufficient to enter into partnership form of organisation. Even the registration of partnership is not compulsory.• Large Resources: The partnership form of organisation enjoys large resources than a sole proprietorship so that the scale of operation can be enlarged to get the benefit of large-scale economies.
• Flexibility:The business is, abundantly mobile, flexible, and elastic being free from legal restriction on its activities. The partners can introduce any change they consider desirable to meet the changed circumstances.
• Combined Skill and Balanced Judgement:-The partnership form of organisation enjoys the benefit of the ability, experience, and talents of the partners. This is the distinctive advantage partnership enjoys over the sole proprietor because everything is done by mutual consultation.
• Sharing of Risk:-Any loss sustained by the firm will be borne by all the partners equally with the benefit that the burden borne by each partner will be much less whereas the sole proprietor has to bear the entire loss of the business.
• Maintenance of Secrecy:-The partners of partnership firm can keep the business to themselves. In the case of a company, nothing is secret. A partnership firm is not expected to get its accounts audited and published as is necessary for a company.
Procedure for the Registration of Partnership
1. Form No. 1 duly filled with Rs. 3/- Court fee stamp affixed on it.
2. An attested copy of the Notorised or Registered Partnership Deed on Non-Judicial Stamp Paper equal to 1% of the capital amount introduced with a ceiling of Rs. 5000/-
3. NOC-cum-Affidavit in prescribed format on Rs. 10/- Non-Judicial Stamp Paper by the Property Owner/GPA Holder with Rs. 5/- Notarial stamp affixed thereon in respect of principal place of business as well as other additional place of business, if any.
4. Filing of all documents and receiving a Certificate of Registration of Partnership Firm.
Documents required for Registration of Partnership
1. Passport size photograph of all partners.
2. Firm Name
3. Self-Attested Pan Card of all partners .
4. Self-Attested Address proof of all partners (like Aadhar Card, Voter’s ID, Passport, Driver’s license)
5. Name of Products / Services in which Your Firm is dealing.
6. If Business Property is own provide Electricity Bill or Legal Ownership Documents other-wise Provide Rent Agreement.
7. Duration of Partnership along with profit sharing ratio among partners.
8. Details of capital contribution by partners.