Partnership Firm Registration
The partnership firm is formed between the partners and the loss and gain are shared between them as per the agreement. Hence the partnership deed plays an important role. The law relating to the partnership firm is prescribed in Indian Partnership Act 1932. The Act lays down the rights, duties, legal relations between the partners and the third persons. It is also stated in the Section 4 of Indian Partnership Act. It is important to say that this sort of the deal can arise only from the contract. It cannot arise from the status. The nature of the partnership must be contractual and should be done voluntarily. If any of the partners is not actively participating in the conduct of the business, then he is called as “dormant partner”. A person who just lends his or her name without having any real interest, then he or she is nominal partner.
- The partners shall come together with the object of profit.
- At-least two individuals should come together to form the partnership firm.
- A company or another legal entity cannot come together to form the partnership firm.
- Agreement between the partners should blossom.
- Minimum share capital is not fixed.
- Minimum 2 and maximum 10 members for banking business, 20 for non-banking business must be there to form the partnership firm.
- It is based on the contractual relationship
- Partnership is formed to carry-out lawful business and to share the profit and the loss.
- There are some restrictions to transfer the share.
- There is diffusion of risk.
- It is easy to form and it is flexible.
- The tax rates that are applicable are lower.
Documents required for partnership firm registration
- Name of the business firm
- Address proofs of the business firm
- PAN copy of all the partners.
- Address proofs of all the partners
- Rental agreement if the pace is on the rent, EB bill is necessary.
Yes. For undertaking a person may become a partner with another.
Yes. The law assumes each partner is an agent of the other and dealing with good faith.
Yes. The firm is liable for all the wrongful act of the other person.
Yes. The death of the partner dissolves the firm.
Trust is the basic for the partnership to operate. They find ways to focus on the solutions, and their skills, knowledge and the money blend together to form the good working of the partnership.
The main difference between the partnership and the LLC is that general partners of any partnership are personally liable for any debts of the business. This aspect is not present in the LLC.
The breach of the agreement means that one of the parties did not live up to the end of the bargain. If any of the agreements are not met, it is considered as breach.
For any of the agreements to be valid, it should include form of consideration. The agreeing parties should exchange something of value from the agreement.
A performance agreement is an agreement which is formed to perform a task. The music bands use the performance agreements to sign the deals..
The partnership firm does not pay any income taxes. The income of the partnership passes through the business of the partner.