Partnership Firm

A business organization in which two or more individuals manage and operate the business. The owners of a partnership business are individually known as the “partners” and collectively as a “firm”.

A partnership is formed by an agreement: which may be either written or oral. When the written agreement is duly stamped and registered, it is known as “Partnership Deed”

Type of Partnership

• Un-Registered Partnership
• Registered Partnership
• Limited Liability Partnership (LLP)

Registration Applicability

• Un-Registered Partnership
• Registered Partnership
• Limited Liability Partnership (LLP)
• Not compulsory to be registered
• Registration with Registrar of Firm
• Registration – Ministry of Corporate Affairs

Legal Provision Regulated & Controlled by

• For Registered & Un-registered – Indian Partnership Act, 1932
• For Limited Liability Partnership (LLP) – Ministry of Corporate Affairs

General Content of Partnership Deed

• Name of the firm.
• Nature of the business to be carried out.
• Names of the partners & their Profit Sharing Ratio
• The town and the place where business will be carried on.
• The amount of capital to be contributed by each partner.
• Loans and advances by partners and the interest payable on them.
• A number of drawings by each partner and the rate of interest allowed thereon.
• Duties and powers of each partner.
• Any other terms and conditions to run the business.

Advantage of Partnership Your business is easy to establish and start-up costs are low. More capital is available for the business & greater borrowing capacity. Less statutory compliances as compared to Private limited Companies. Better decision making and control over the business.

Dis-Advantage of Partnership Limitations to keep the firm in converting in a large business scale. Unlimited liability. General partners are liable without limit for all debts contracted and errors made by the partnership. Since decisions are collective, disagreements can occur.

Registration Process

Un-Registered Partnership Draft Partnership Deed Noterized the Deed Obtain PAN Obtain TAN Open Bank Account Start the Business

Registered Partnership Draft Partnership Deed Appear both partners & submit required documents with Registrar of Firm Obtain Registration Certificate Obtain PAN & TAN Open Bank Account & Start the Business

Limited Liability Partnership (LLP) Obtain DIN No. & DSC of all partners Name Approval filed in Form-1 & Form-2 sent for MCA after approval LLP Agreement (Partnership Deed) is drafted and filed along  with Form-3 within 30 Days. Get the Incorporation Certificate. Obtain PAN & TAN Open Bank Account & Start