Partnership firm is the better solution than sole proprietorship. More Managerial skills and more capital help business to grow faster and bigger. The Partnership Firm govern under The “Indian Partnership Act, 1932”. As per “Indian Partnership Act, 1932” “the relation between persons who have agreed to share the profit of the business carried on by all or any one of them acting for all.” Under Partnership Firm Two or more persons jointly start the business with pre defined terms and condition.
Salient features of the Partnership Firm are as follows:
The partnership firm is easy to form. The exit of Partnership is also a simple process. Exit and formation also includes the process of entry of a new partner and exit of any existing partner. This process also includes at the time of death of any existing partner in a firm. The process is very simple governed by Indian Partnership Act, 1932.
Normally the Liability of a partner is unlimited. But in some cases the Liability is based on the Contract or Partnership Deed or its clauses. Partnership are of various types like Limited liability partnership and others. The partners are jointly and individually liable for the debts of the Firm. Any Creditors can recover its due from any partner in Partnership firm.
Normally the decisions of the firm or business are taken by partners with mutual consent. The decision or act of any Partners is bound to the Partnership Firm and other Partners. Control and decision making in the day to day working and important decisions can also be set and governed by the Partnership Deed. It can be mutually decide between the partners that one or some partner can be act as sleeping partners.
A partnership firm can have the following types of partners:
An active partner is a person who contributes active capital and participates in the day to day management of the partnership firm. He acts as a major partner and take active part in decision making and customer handling. These partners take actual part in carrying out business of the Partnership firm.
Sleeping Partner is a partner who does not take any part in the day to day activities of the partnership concern and called as sleeping partners. A sleeping partner, however, contributes capital of the partnership firm and also shares its profits and losses.
There are many parts of Partnership Firms. Some are discussed below:
It is a normal type of partnership firm where two or more person contribute to equally in the capital of the partnership firm and distribute equal profits and suffer equal losses. The liability of each partner is unlimited. The decision can be taken by any of the partner on behalf of other partner.
Partnership formed for the accomplishment of a particular project or for particular time is called Particular Partnership. This form of partnership is famous in construction industries where the partnership firm is based on the construction of a building or an activity to be carried on for a specified time period. The particular partnership dissolves automatically when the purpose or project for which it was formed is fulfilled or when the time duration expires.
This type of partnership exists at the will of the partners. It can continue as long as the partners want and is terminated when any partner gives a notice of withdrawal from partnership to the firm.
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1. Photograph of all partners
2. Pan Card of all partners
3. Aadhar Card of all partners
4. Bank Account of all partners
5. Address Proof of office
6. Copy of Ownership Proof
7. Partneship Deed