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ABOUT PARTNERSHIP FIRM
A Partnership firm is a business structure that is operate, managed and controlled by association of people for profit according to the terms, conditions and objectives set out in a partnership deed. In partnership business the members are individually partners and share the profit and liability of the firm in a predetermined ratio.
In India, Partnership firm are governed by Indian Partnership Act, 1982 under section 4. Partnership is the relation between person who have agreed to share the profits of a business carried on by all or any of them acting for all.
Partnerships are of two types i.e. registered and un-registered. Registration of partnership firm is not compulsory but if it registered, advantages are added.
EASY TO FORM
Like sole proprietorships, partnership businesses can be formed easily without any compulsory legal formalities. It is not necessary to get the firm registered. A simple agreement or partnership deed, either oral or in writing, is sufficient to create a partnership. Registration of the partnership is voluntary in most states. However, it would be best to check up the rules of your state to be sure. In states like Maharashtra, registration is almost compulsory.
In a partnership firm all the partners’s share the business risks. Because of this, the partners may be encouraged to take up more risk and hence expand their business more.
AVAILABILITY OF RESOURCES
Since two or more partners join hands to start a partnership business, it may be possible to pool together more resources as compared to a sole proprietorship. The partners can contribute more capital, more effort and more time for the business.
FLEXIBILITY IN OPERATIONS
A partnership firm is a flexible organization. At any time, the partners can decide to change the size or nature of the business or area of it’s operation. There is no need to follow any legal procedure. Consent of all the partners is required only.
BENEFITS OF SPECIALIZATION
Since all the partners are owners of the business, they can actively participate in every aspect of business as per their specialization, knowledge and experience. If you want to start a firm to provide legal consultancy to people, then one partner may deal with civil cases, one in criminal cases, and another in labour cases and so on as per the individual specialization. Similarly, two or more doctors of different specialization may start a clinic in partnership.
- Minimum 2 partners.
- Partnership Deed.
DOCUMENTS REQUIRED FOR REGISTRATION
IDENTITY AND ADDRESS PROOF
Aadhar Card, Aadhar number is now a necessity for applying for any registration in India.
Income tax return can only be filed if the person has linked his PAN card with Aadhar number.
Address proof will be required for all directors and shareholders of the company to be incorporated.
For Indian nationals, PAN is mandatory. For foreign nationals, Apostilled or notarised copy of passport must be mandatorily submitted.
Residence proof documents like bank statement or electricity bill should not be more than 2 months old.
All documents submitted must be valid.
REGISTERED OFFICE PROOF
- Register office of all companies must be in India .If it is a Rented Property, Rent agreement and NOC from a landlord. If it is a Self-owned Property, Electricity bill or any other address proof.
- Documents submitted must be valid and not more than 2 month old.
- Form no. 1 (application for registration under partnership act)Original partnership deed, signed by all partners .Affidavit declaring intention to become partner.