A Partnership Firm is a popular form of business constitution for businesses that are owned, managed and controlled by an Association of People for profit. Partnership firms are relatively easy to start and it is suitable for small and medium sized businesses in the unorganized sectors.
For Partnership Registration, you must agree on a firm name and then establish a partnership deed. It is a document stating respective rights and obligations of the partners and to be valid it should be written and not oral. The terms of the Partnership Deed can be varied to suit the interests of the partners and can even be made contrary to the Indian Partnership Act, 1932 but if the Partnership Deed is silent on any point, then the provisions of the Act would apply
Types of Partnership Firms
There are two types of Partnership firms-
- Registered Partnership Firm
- Unregistered Partnership Firm
It is neither mandatory to register the firm to start a business nor is there any penalty for no-registration. It is the sole choice of the partners and business owners. It is advisable to register a Partnership firm sooner or later to legalize it and enjoy the various rights so offered.
Advantages Of Partnership Firm
- Partnership firm can be easily & quickly registered in comparison to other form of business
- Less formal with fewer legal obligations
- Better decision-making
- Tax Benefit
- Sharing of Risk
- Low compliance & disclosure required as compare to other business form
Disadvantages of Partnership Firm
The partnership firms are limited to certain levels. If the investors, venture capitalists, and others approach, then the firms hold back. Their functioning is not as transparent as other firms and businesses registered in other ways.
Documents Required for Partnership firm Registration
- Aadhar Card/ID Proof copy of all partners
- PAN card copy of all partners
- passport size photo of all partners
- Proof of business address(Electricity/ Water bill of Business Place)