How to Start a Partnership Firm in India
Start a business can be divided into several steps. The first step is careful planning you will be subject to business, how that service or product to offer customers what is their purpose and why to be interest. Based on the exact balance when you know about the procedures, risks and opportunities, they will have to follow steps to obtain a business license to the relevant authorities. The third step is to start your own business. While specific performance business is no longer exclusively for you, in various parts of this section you will find information on what precedes the business itself.
Whether you plan to feed its own business activities, or just slightly ends meet, the beginning is always a certain concept or idea that it is necessary to guess. Which form of business is best for you? What to do when setting up a trade? How to avoid unnecessary mistakes?
Selecting appropriate forms of business
Think in advance about how, in what form your business plan can best be done. There is no universal way. Requirements, conditions and needs of each business are different. Other useful information can be found for example in articles:
- Commercial activities under the Company Act
- Enterprises may be otherwise than on trade under the Company Act
Think about how large your business. It can be estimated with regard to the planned scope or estimated target group of customers? If so in advance; think about whether you will take as a natural self-employed (self-employed) or through a limited company, cooperative, association, or otherwise. If you have some big private project and need support from different segments then partnership firm is the best choice.
Legal Process How To Register A Partnership Firm In India
With two or more partners; a business can be registered as partnership firm in India. Under the same form of corporate; a partnership agreement plays a vital role where it describes the ratio of profit and loss among the partners, tax liabilities and other rules and regulations that every partner needs to adhere with. Partnership firm in India is one of the most common and highly popular forms of corporate that is being followed by major business section in India.
Before set up partnership firm in India there are several legal rules and procedures being prescribed by higher authority of Ministry Of Corporate Affairs.
- Maximum numbers of partners allowed under partnership firm is 20
- While applying for registration of partnership firm in India; firstly it needs partnership deed and sign by all the partners that use to mention over the Rs. 500/- stamp paper in a legal form that further require to submit to the concern authority.
- This partnership deed can be edit or altered while admitting of any partner or retirement of partner or on death of any partner but that can only come into existence by written instrument on Rs. 500/- stamp paper.
- Indian Partnership Act, 1932 is the act that govern and managed the applications for registration of partnership firm in India.
- For registration; first get select the name of your partnership firm and file an application for the same to the Registrar of company in India under the same region where your head office is being situated.
- After getting the approval of company's name then file an application for company incorporation along with required legal documents including Address Proof of Principle Place of business of the Firm, certified copy of partnership deed, ID & Address Proofs of partners and many more.
- Unlike to other forms of corporate; here with partnership firm one need to PAN numbers for the firm that separate from existing PAN numbers of all the partners of the same partnership firm.
- Each partner of the partnership firm is liable to its liability. Unique liability is the key feature of this partnership firm in India. Thus, under any claim the damaged party can sue to any partner or partners out of whole team of partners of partnership firm that may or may not be proportionate to the earnings of the partners but all these rules and regulations in respect of damages and liability should be define in partnership deed in advance in order to avoid further disturbances.
Like as sole proprietorship; the registration of partnership firm in India is not simple the way it is looking around. Capital, ratio o profit or loss, liability ratio, investment ratio, in case of any damage, at time of retirement or demise and many more aspects must be specified in partnership agreement with the following segments :
As we already mentioned that partnership firm is one of the highly favorable form of corporate in India that is being applied by major section of the society as because of below advantages:
- How to allocated Profit or loss in the business
- Any form of draws and salaries against the profit and ratio of incentives if any.
- Job roles and responsibilities of each partner and other management responsibilities
- What if any death, disability, retirement of any partner; this should be in detail.
- What is the method and way of liquidation or dissolution of partnership firm in India.
- In case of any huge project two or more person can form a partnership firm in order to reap the complete legal benefits and to run their business smoothly.
- It is easy to form a partnership firm in India just deed partnership deed but it takes time to get approval as compare to other forms of corporate.
- It is easy to raise the capital or getting support from different partners at the time of crises. It is easy for partnership to handle corporate tasks.
- The profit from partnership firm is subjected to direct tax to the partner's personal tax returns that does not pass to any second level.
- Can enjoy the complete benefits of diversity in skills and knowledge of different partners that can use or further development.