A partnership firm is an organization which is formed with two or more persons to run a business with a view to earn profit. Each member of such a group is known as partner and collectively known as partnership firm. These firms are governed by the Indian Partnership Act, 1932. It is a Central Act but administered by State. In a unique feature, all partners have unlimited liability in the business. The partners are all individually and jointly liable for the firm and the payment of all debts. This means that even personal assets of a partner can be liquidated to meet the debts of the firm. It may be for temporary purpose or permanent. A partnership deed can be entered as such. The words LLC, Inc, PJSC, GMBC, PTE LTD, PVT LTD & LTD are not allowed to be used at the end of the firm's name. Certain words are prohibited in the firm name Ex: India, one can refer Prevention of Names and Emblems Act.
Firm registraton is not mandatory, with out registration also, we can apply pan card and run the business. It may be registered with the District Registrar office so as to show their customers that their business is registered.
To register a Partnership firm, there should be two partners. An NRI/Foreign National may become partners of the firm but one of the partners should be Indian local resident.
Who shall register a Partnership Firm: It is preferable for a small business owners where more capital is not required.
The Limited Liability Partnership (LLP) is one of the business concepts in India, introduced by the Ministry of Corporate Affairs (MCA), Government of India during the year 2008. Unlike a partnership firm, a limited liability partnership have limited liability in which some or all partners will have the limited liability. It exhibits the elements of both partnership and company. In LLP, one partner is not responsible or liable for another partner's negligence or misconduct.
The limited liability partnership is a legal entity and an alternative to corporate business form. It is liable to the extent of it's total assets whereas the partners liability is limited to the extent of their capital contribution. We can say LLP is an hybrid between a company and a partnership. LLP Registration is regulated by The Ministry of Corporate Affairs, Government of India. The governing law for the LLP is Limited Liability Partnership Act, 2008.
Who shall register LLP: Those who are looking for Traditional, Brick & Mortar Businesses.
We will prepare Partnership Deed, Form-1, Rental Agreement or NOC from the Landlord and other supporting documents.
We will upload the documents online with the District Registrar web portal and pay the requisite fee.
After scrutiny, the District Registrar will approve the form and issues you the Certificate of Registration through online.
|Certificate of Registration||Partnership Deed|
|Firm PAN||Firm TAN|
|GST Registration||MSME Registration|
As of now, the Ministry of Corporate Affairs (MCA) is giving automatic Bank Account only for Companies in any one of the following banks (ie. Punjab National Bank, ICICI Bank, Kotak Mahindra Bank, Bank of Baroda, HDFC Bank, State Bank of India, Union Bank of India, IndusInd Bank or Axis Bank). In case of Firm Registrations, you need to open bank account separately once the Firm is registered. We will help getting your Firm Bank Account opened.
We will file PAN & TAN application once the Firm Registration is done. You will get PAN & TAN with in 10 days.
Every supplier shall be liable to be registered under this Act in the State or Union territory, other than special category States, from where he makes a taxable supply of goods or services or both, if his aggregate turnover in a financial year exceeds twenty lakh rupees*:
Provided that where such person makes taxable supplies of goods or services or both from any of the special category States, he shall be liable to be registered if his aggregate turnover in a financial year exceeds ten lakh rupees**.
* This limit is increased to Rs. 40 Lakhs w.e.f 1st April 2019 for all states except the State of Telangana. Special category states ie. Jammu and Kashmir, Ladakh and Assam also opted Rs.40 lakhs limit.
** This limit is increased to Rs. 20 Lakhs w.e.f 1st April 2019 for Special Category States.
We help registering your business under GST by making application online subsequent to the business formation. This GST Registration in India is online and subject to approval with the GST Officer. Normally, with in 4 to 5 days, you will get your GSTIN and some times it may be delayed due to various reasons.
Subsequent upon your Firm Registration, you need to apply for certain other licenses such as (ie. MSME Registration, Import Export Code (IEC), Shops & Establishments Registration, Professional Tax Registration (PT), FSSAI License, Local Trade License etc. We help you get these licenses at an affordable cost.
One your register your Partnership Firm, you need to file certatain periodic documents with the GST department, Income Tax Department and Other Statutory Department online by paying requisite fee. Apart from filing documents, you need to maintain certain records, registers and maintain books of accounts. You need to prepare the Firm financials such as Profit & Loss Account, Balance Sheet, Shedules to Accounts, Notes to Accounts etc. Our team of experts will assist you in getting all these compliances done at an affordable cost.
Our team of experienced Chartered Accountants & Company Secretaries will help you get funds to run your business by preparing project reports, business plans & term sheets etc. We also help you pay less tax to the government through a proper tax planning.
The Partnership Firm can be formed with low cost and simple documentation where as a Private Limited Company or Limited Liability Partnerhip incurr lot of cost at the time of incorporation. Digital Signature Certificate is not required to registar a Partnership Firm. The annual compliance cost is much cheaper than that of Private Limited Company or Limited Liability Partnership. A partnership firm is not required to submit or file any documents with the Registrar of Firms an annual basis. It has to file documents with the Registar whenever there is a change in the constitution of the Firm.
Income Tax Audit is not required for a Partnership Firm if the turnover of the Firm does not exceed Rs. 1 Crore in a financial year and Rs. 2 Crore in case of presumtive income scheme. There is an opportunity for income splitting, an advantage of particular importance due to resultant tax savings. A maximum of 60% of Book Profits can be paid as remuneration to partners of the firm. The remuneration and interest to partners are elibilt to claim as deduction while computing the income from profits and gains from business and profession of the firm, which is subject to limits prescribed under Section 40(b) of the Income Tax Act. The following table illustrates the eligible rementaion payable to partners of the firm:
You can download it here Click Here or you can view herein below:
The Partnership Deed can be drafted as per the wishes of the partners of the firm. One partner may have more pwoers than others. One partner may become managing partner who will look after marketing, financial and maintaining the day to day administration and business and the other partner will assist first partner. One partner may be authorised to operate the bank account while the other may act as sleeping partner.
Unlike a Company, a Partnership Firm has a conrol over decision making of business transaction and it is vested in the hands of partners of the firm and the financail information of the business can not be accessed by third parties. In a Company, the financials can be easily accessable on MCA web portal.
The Partnership business is also relatively preferable for small businesses and the profits or losses are shared among the partners of the firm. In case of a Proprietorship business, the loss is to be born wolly by the proprietor concerned and in a Partnership business, it has to be shared by both the partners of the firm according the agreed ratio. Hence, the parners may incurr lessor loss when comparing with a Proprietorship business.
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We have the expertise to advise which is the correct corporate structure they need to put in place. Most customers come to us for help registering a company limited by shares. The limited company structure is popular as it allows profits to be distributed amongst the shareholders while at the same time protecting them through the limited liability aspect. Our team has well over 20-years of combined expertise forming companies and providing corporate and secretarial services that help thousands of our clients grow their businesses each year.
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Partnership is an agreement between two or more people to share the profits of a business.
Not mandatory. A partnership business may be run without registration.
The capital is the intial amount of investment by the partners of the firm both in cash or kind.
3 to 5 working days.
The fee varies from State to State in India. Normally, per parter Rs. 100/- is payable to the government.
Yes, you can start a partnership firm from your home address too.
Yes, you can but an advoate attestation is required on the application forms. It is advisable to approach a consultant like us before making application for firm registration.
No. He or she should be a major.