Apply for Partnership Firm
What is Partnership Firm?
• A partnership comes into picture when two or more people agree to go into business together and both might be from same family or same association, whether or not they have a written contract
• Ideally, it is mandatory to validate the details in a partnership agreement that specifies each partner’s rights, responsibilities, and share of the profits
• Partnership firms are registered with the Registrar of Firms
• Steps to Apply for partnership Firm
• Fill up basic requirement form
• We’ll collect all your documents and file them directly with the authority
• You’ll receive your completed Partnership Company package by mail
Benefits of Partnership Firm
- Low tax liabilities
- Easy to control as managed by few promoters
- Freedom to choose any business name but make sure that the name is not a trademark of any other company or individual
- Easy to start with a minimal registration process
- Easy to shut down the company with very less compliances
- Partnerships are easy to incorporate and flexible to manage. Unlike corporations and LLPs, you won't have to file formation documents or annual reports with the state
Documents Required
- Voter's ID/Passport/Driver's License PAN Card
- Voter's ID/Passport/Driver's License
- Passport-sized photographs
- Proof of registered office
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Comparison
| Private Limited Company | One Person Company | Limited Liability Partnership | Partnership Firm | Proprietorship Firm | |
|---|---|---|---|---|---|
| Act | Companies Act, 2013 | Companies Act, 2013 | Limited Liability Partnership Act, 2008 | Indian Partnership Act, 1932 | No specified Act |
| Registration Requirement | Mandatory | Mandatory | Mandatory | Optional | No |
| Number of members | 2 – 200 | Only 1 | 2 – Unlimited | 2 – 50 | Only 1 |
| Number of Director/Partner | 2 – 15 | Only 1 | 2 – Unlimited | 2 – Unlimited | Only 1 |
| Separate Legal Entity | Yes | Yes | Yes | No | No |
| Liability Protection | Limited | Limited | Limited | Unlimited | Unlimited |
| Statutory Audit | Mandatory | Mandatory | Dependent | Not mandatory | Not mandatory |
| Ownership Transfer ability | Yes | No | Yes | No | No |
| Uninterrupted Existence | Yes | Yes | Yes | No | No |
| Foreign Participation | Allowed | Not Allowed | Allowed | Not Allowed | Not Allowed |
| Tax Rates | Moderate | Moderate | High | High | Low |
| Statutory Compliance | High | Moderate | Moderate | Less | Less |
Liabilities of Partnership Firm
- Partners are personally liable for the business, including all debts and liabilities of the other partners
- Once partners are engaged in a business, each partner is personally liable for the actions of that business, including the obligations of the other partners. There are no shields against personal liability
- The share in a Partnership can be transferred to another partner after obtaining the permission of all the Partners in a Partnership
Taxes for Partnership Firm
A general partnership doesn’t pay any income taxes. Instead, profits and losses flow through to each of the partners, who are responsible to report it on their personal income tax returns.
Frequently Asked Questions (FAQs)
• One or more Partners can be designated to manage the Partnership Firm
