Partnership
Partnership
A Partnership Firm is a popular form of business constitution for businesses that are owned, managed and controlled by an Association of People for profit. Partnership firms are relatively easy to start are is prevalent amongst small and medium sized businesses in the unorganized sectors. With the introduction of Limited Liability Partnerships in India, Partnership Firms are fast losing their prevalence due to the added advantages offered by a Limited Liability Partnership.
There are two types of Partnership firms, registered and un-registered Partnership firm. It is not compulsory to register a Partnership firm; however, it is advisable to register a Partnership firm due to the added advantages. Partnership firms are created by drafting a Partnership deed amongst the Partners and Bizbaba can help start a registered or un-registered Partnership firm in India.
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General Partnerships do not need to appoint an auditor or, if unregistered, even file annual accounts with the registrar. Annual compliances are also fewer as compared to an LLP. General Partnerships do need to file Income Taxes and, depending on turnover, service and sales tax.
Partnership Process
Selection of Name
A Partnership firm need to be started with a separate name by declaring the same in the agreement to be the name of the firm. However care should be taken while deciding the name of the firm to avoid any conflict with someone else trademark. We advises that the name of firm should be cross checked with the trademark registry to avoid any infringement or passing off the others Trademark or brand name.
Partnership Deed Drafting
The Partnership Agreement is the constitution of the firm which determines the relationship of partners among themselves as well as the relation of partners vis a vis firm. The agreement also lays down the methods of admitting a new partner or for removal of partner. The capital, Interest on Capital, Partners Salary, and profit sharing ratio are some of the predominant items in the agreement which need to be carefully drafted.
Partnership Deed Notarization
A Partnership Deed must be well drafted and the signature of the partners be made on the agreement in presence of witnesses before a Notary Public. This brings certainty and establishes that the agreement of partnership is made with free consent of the parties and in presence of witnesses so that no one backs out later on that he is not the party of the agreement.
Partnership Firm Registration
Though the partnership act 1932, does not make the registration of firm mandatory, However in view of limitations imposed by section 59 of the act. It is strongly recommended to get the firm registered by filing the application before the registrar of the firm. In the application KYC of the partners, copy of deed, KYC of the premises where the firm is situated is filed.
Pan Card of the Firm
PAN is the abbreviated form of Permanent Account Number, which is a ten digit alphanumeric number allotted to the assesses of the income tax by the Income tax office ( ITO). it is a unique number which identifies the firm before the IT Department. Form No 49A need to be filed along with the copy of partnership deed to get the PAN Card. It takes around a week time.
Partnership Firm Registration
Though the partnership act 1932, does not make the registration of firm mandatory, However in view of limitations imposed by section 59 of the act. It is strongly recommended to get the firm registered by filing the application before the registrar of the firm. In the application KYC of the partners, copy of deed, KYC of the premises where the firm is situated is filed.
TAN Number Allotment
A liability is created to deduct the tax while making payments in the course of business. The TDS rates are specified separately which ranges between 1-20% depending upon the transaction. The TDS so deducted is deposited with the Income Tax Department and details are filed through the quarterly return of TDS. To comply with the provisions of TDS a TAN number is needed which is a unique number allotted by the Income Tax Department.
Documents Required for Partnership Registration
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