When two or more individuals enter into an agreement to manage and operate a business they form a partnership. The members are individually partners and share the liabilities as well as profits of the firm in a predetermined ratio. It is suitable for small businesses that do not want to grow aggressively or have contracts with large liabilities. Low costs, ease of setting up and minimal compliance requirements make it a sensible option for such businesses.
With the advent of Limited Liability Partnerships (LLPs) has been losing popularity although they remain in vogue for small businesses especially those not looking for any debt.
HOW WE CAN HELP YOU TO START
We will handhold you through the process of setting up the business.
- We will help you draft your partnership deed
- We will register the partnership deed for you if you want
- We will help you with TAN and GST.
- Further depending on nature of business and transactions if you may also need we will do registration for Shops & Establishment Act, Professional Tax, Import Export Code and MSME
HOW WE DO IT
The process is simple. We call you back and discuss/understand what your needs are. Once that is done we send you a formal proposal mentioning the documents we need (we will discuss options for the same before sending proposal) and fees for the service. You pay us online and send us the documents. We complete the filing process and you are ready to start
SUPPORTING YOUR ON-GOING BUSINESS
- We can maintain your accounts and give you periodic progress reports at end of every month
- We can file your TDS & GST returns
- We can compile and file your income-tax returns
PARTNERSHIP DEED REGISTRATION
Registration is optional for general partnerships – it is not compulsory. It is advisable to register a Partnership firm due to the added advantages. Only a registered Partnership firm can file a suit in any court against the firm or other partners for the enforcement of any right arising from a contract or right conferred by the Partnership Act. Also, only a Registered Partnership firm can claim a set off (i.e. mutual adjustment of debts owned by the disputant parties to one another) or other proceedings in a dispute with a third party. Partnership firms are registered by the Registrar of Firms, under the Indian Partnership Act, 1932.
Identity Proof of partners:
- PAN card for Indian nationals (we can do it for you in case you do not have it or need any corrections)
- Notarised copy of passport for foreign national
Address Proof of partners (Any One)
- Driving license
- Aadhaar card
- Bank statement (less than 2 months old)
Registered Office Address Proof:
- Rental Agreement OR sale/registration deed (if owned)
- Copy of recent utility bill (electricity/water) or property tax receipt
- No objection certificate from landlord for use of property as registered office (for rented offices)
- Form No. 1 (Application for registration under Partnership Act)
- Original copy of partnership signed by all partners
- Affidavit declaring intention to become partner
KEY POINTS & FEATURES:
Structure & Ownership
- A minimum of two Persons is required to start a Partnership firm. A maximum number of 20 Partners are allowed in a Partnership firm
- A partnership firm has no separate legal existence of its own i.e., the Partnership firm and the partners are one and the same in the eyes of law. Liability of the Partners is also unlimited, and the partners are said to be jointly and severally liable for the liabilities of the firm. This means that if the assets and property of the firm is insufficient to meet the debts of the firm, the creditors can recover their loans from the personal property of the individual partners.
- The partners must be an Indian citizen and a Resident of India.
- There are restrictions on the transfer of ownership interest in a Partnership firm. A Partner cannot transfer his/her interest in the firm to any person (except to the existing partners) without the unanimous consent of all other partners.
- The partnership deed will determine the ownership of the firm, profit sharing ratio, rights and responsibilities of each of the Partner. Typically the deed should contain names of the partners and their addresses, the partnership name (business/trade name), the date of commencement of operation of the firm, any capital invested by each partner, the type of partnership and profit-sharing matrix, rules and regulations to be followed for intake of partners or removal.
- If the Partnership firm is registered, the Partnership deed will be registered and a Registration Certificate will be issued by the Registrar of Firms.
Business Name/Trade name
Since the name of a Partnership firm is not registered, a Partnership firm can choose to have any name – as long as it does not infringe on a registered trademark.
Bank account can be opened in the name of a Partnership firm. To open bank account, the partnership deed copy and KYC documents of the partners must be submitted along with any other document as required by the Bank
- Partnership firm will have to file their annual tax return with the Income Tax Department.
- They would also have to file necessary returns under GST and other applicable laws.
- Audit is not required unless the turnover exceed 40lakh (for income tax) or 2 crores (for GST)
- Annual report or accounts need not be filed with the Ministry or Corporate Affairs, which is required for Limited Liability Partnerships and Companies.