Registration of Partnership firm
A partnership firm is a type of business structure where two or more individuals come together to carry out a business with a view to making a profit. In a partnership firm, the partners share the responsibilities, profits, losses, and decision-making.
RAAAS can provide you best assistance in starting your partnership firm.
Characteristics of Partnership firm
- Partnership firm requires minimum of two partners, with maximum limit determined by law or agreement.
- Partnership formed through mutual agreement, involving partners in business activities and sharing profits or losses.
- A partnership deed is a written agreement outlining terms, conditions, partners, capital contributions, and decision-making processes.
- Partnership firms offer unlimited personal liability for debts and obligations, allowing partners to use their assets.
- Partners share business profits and losses based on agreed-upon ratios in partnership deeds, based on capital contributions or other criteria.
- Joint management involves partners participating in firm decision-making, with consent required for certain actions.
- Partnership firms lack a separate legal identity, attributed to partners, limiting their actions and obligations.
- Partnership firms can be dissolved through mutual agreement, term expiry, project completion, bankruptcy, or death, with a partnership deed outlining dissolution provisions.
What are the situations when Partnership firm is required to be Registered?
Registration of a partnership firm is generally required in the following situations:
- Voluntary registration: Partner registration offers legal recognition, tax benefits, and enhanced credibility without legal necessity.
- Partnership Act requirements: Partnership Act mandates registration in some countries, specifying criteria and procedures, and failure to comply may result in legal consequences.
- Banking and financial institutions: Banks and financial institutions require partnership registration for bank account opening, ensuring assurance, credibility, and access to financial services.
- Government contracts and tenders: Partnership registration may be required for government contracts and tenders to ensure transparency and compliance.
- Intellectual property protection: Partnership registration is required for intellectual property rights, including trademarks and patents, ensuring legal existence.
- Dispute resolution:Registered partnership firms have legal remedies for dispute resolution, protecting their rights and resolving conflicts among partners or third parties.
Need of Registration of Partnership firm
Registration of a partnership firm is required for several reasons:
- Legal recognition: Registration grants partnership firm legal recognition, establishing a distinct identity, enabling contract entry, asset ownership, and liability.
- Evidence of partnership: Partnership deed provides evidence of terms and conditions, aiding dispute resolution and clarifying rights, duties, and profit-sharing ratios.
- Tax purposes: Registration is crucial for tax compliance, enabling partnership firms to obtain PANs and file returns, benefiting from government tax benefits.
- Legal protection: Registered partnership firms have legal protection, including personal assets protection, access to remedies, and dispute resolution mechanisms for conflicts or disagreements.
- Government benefits and schemes: Registered partnership firms can access government schemes, subsidies, grants, or loans for financial assistance and business growth.
- Succession and transfer of ownership: Registration facilitates ownership transfer in partnership firms, allowing partner addition or removal, ensuring seamless operations despite partner composition changes.
Advantages of Registration in Partnership Firm
- Legal recognition: Registration grants partnership firm legal recognition, establishing distinct identity, enabling contract entry, asset ownership, and legal entity management.
- Partnership deed as evidence: Partnership deed serves as evidence of terms and conditions, aiding dispute resolution and clarifying rights, duties, and profit-sharing ratios.
- Bank account and financial transactions: Registered partnership firms can open bank accounts, simplifying financial transactions, professional image, and obtaining loans or credit facilities.
- Tax benefits and compliance: Registered partnership firms enjoy tax benefits, including deductions, asset depreciation, and efficient distribution of profits, while ensuring compliance with government regulations and filing income tax returns.
- Access to government schemes and benefits: Registered partnership firms can access government schemes, subsidies, grants, and loans for financial assistance, supporting business growth and development.
- Credibility and trust: Registration boosts partnership firm credibility, trustworthiness, and reliability, attracting more business opportunities and collaborations.
- Easy transfer of ownership: Registered partnership firms enable easy ownership transfer by amending deeds and informing the Registrar, ensuring flexibility and continuity.
- Legal protection and dispute resolution: Registered partnership firms have access to legal remedies for dispute resolution, protecting their rights and interests in conflicts or disagreements.
Here at least two individuals own the business, in a particular ratio. They also share profits and losses in this ratio. This is also a simple form of organization. Partnership Act governs this form of business. Partnership Deed and registration of the same is necessary. We can help you in drafting and registering the Partnership deed as well as getting registered with Authorities like VAT and Service Tax. With opening of bank account, you can start the business.
How we help you:
- Advising on choice of formation and suggesting the best suitable form of organization, especially with start-ups.
- Getting necessary registrations with required Authorities such as VAT (for trading firms), Service Tax (for service industries) and Excise (for the Manufacturing concerns)
- Securing business name and logo by registering with Trade Mark and Service Mark authorities
- Assistance in opening Current Account in bank
- Advising on necessary compliances after registrations
Once the registration is done, you can start your business. To further help you, we also provide a monthly package accounting system designed especially for small and medium sized business at very compelling prices and facilitating a designated contact person and monthly visits and reporting. This enables you cut the cost since separate full time accountants are not required to be hired and also the compliances and reports are updated for a bird’s eye glance.
