In a General Partnership firm, the Partners collectively own and manage the business and share their responsibilities and liabilities with each other. Although considered simpler to set up, each partner has ‘unlimited’ liability [his personal property can be used to settle the liabilities of the Partnership].
Basically, a Partnership Firm is a hardship of 2 or more than 2 individuals for the succession of such reserved name under which the firm needs to start or started. Also, under the entrepreneurship activities of the Partnership Firm imposes individually capacity on every partner in terms of contributions of capital, timings, efforts and day-to-day sincere presence in the business of the firm. The partnership may be oral or written, However, as per statutory obligation Partnership deed shall be written.
A partnership firm is a business structure in which two or more individuals manage and operate a business in accordance with the terms and objectives set out in a Partnership Deed that may or may not be registered. In such a business, the members are individually partners and share the liabilities as well as profits of the firm in a predetermined ratio.
A partnership firm is best for small businesses that plan to remain small. Low costs, ease of setting up and minimal compliance requirements make it a sensible option for such businesses. Registration is optional for General Partnerships.
The partners in a partnership firm are the owners, and thus, are not a separate entity from the firm. Any legal issues or debt incurred by the firm is the responsibility of its owners, the partners.
A partnership must have at least two partners. A partnership firm in the banking business can have up to 10 partners, while those engaged in any other business can have 20 partners. These partners can divide profits and losses equally or unequally.
The deed should contain names of the partners and their addresses, the partnership 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.
► Easy to Incorporate : Incorporation of partnership firm is easy as compared to the other forms of business organizations. The partnership firm can be incorporated by drafting the partnership deed and entering into the partnership agreement.
► Less Compliances: The partnership firm has to adhere to very few compliances as compared to a company or LLP. The partners can introduce any changes in the business easily. They do have legal restrictions on their activities.
► Quick Decision: A partnership firm can take a quick decision as there is no difference between ownership and management. All the decisions are taken by the partners together, and they can be implemented immediately.
► Sharing of Profits and Losses: The partners share the profits and losses of the firm equally. They even have the liberty of deciding the profit and loss ratio in the partnership firm.
► Name of your prospective firm
► Nature of Business
► Photographs of each and every partner related to the firm
► PAN and Aadhaar of every partner of the firm
► Original copy of Partnership Deed, signed by all partners
► Office Address Proofs - Rent agreement or sale deed with Electricity Bill