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About

KNOW PARTNERSHIP FIRM

Partnership is an agreement between two or more people to share the profits of a business. The business can be carried on together by all the partners or any one partner representing the others. A partnership can be for a fixed period of time or it may be limited to a specific project or it may be dissolved at will.

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Easy to form: Like sole proprietorships, partnership businesses can be formed easily without any compulsory legal formalities. It is not necessary to get the firm registered. A simple agreement or partnership deed, either oral or in writing, is sufficient to create a partnership.

Availability of large resources:
Since two or more partners join hands to start a partnership business, it may be possible to pool together more resources as compared to a sole proprietorship. The partners can contribute more capital, more effort and more time for the business.

Better decisions:
The partners are the owners of the business. Each of them has equal right to participate in the management of the business. In case of any conflict, they can sit together to solve the problem. Since all partners participate in the decision-making process, there is less scope for reckless and hasty decisions.

Flexibility in operations:
A partnership firm is a flexible organization. At any time, the partners can decide to change the size or nature of the business or area of it’s operation. There is no need to follow any legal procedure. Only the consent of all the partners is required.

Sharing risks:
In a partnership firm all the partners “share” the business risks. For example, if there are three partners and the firm makes a loss of Rs.12,000 in a particular period, then all partners may share it and the individual burden will be Rs.4000 only. Because of this, the partners may be encouraged to take up more risk and hence expand their business more.

Protection of interest of each partner:
In a partnership firm, every partner has an equal say in decision making and the management of the business. If any decision goes against the interest of any partner, he can prevent the decision from being taken. In extreme cases an unsatisfied partner may withdraw from the business and can dissolve it. In such extreme cases the “partnership deed” is required. In absence of the partnership deed, no legal protection is given to the partners.

Benefits of specialization:
Since all the partners are owners of the business, they can actively participate in every aspect of business as per their specialization, knowledge and experience. If you want to start a firm to provide legal consultancy to people, then one partner may deal with civil cases, one in criminal cases, and another in labor cases and so on as per the individual specialization. Similarly, two or more doctors of different specialization may start a clinic in partnership

5-10 days after receipt of all the necessary Documents.

  • Copy of All Partner’s PAN Card, Address & Identity Proof & Residential Proof & Photographs.
  • If the signing person is authorized person then his/her Name, Address, Designation & Telephone number.
  • Address Proof of the proposed Office Premises. (Latest Electricity or Telephone Bills or Municipal Taxes)
  • If address is rented then, Rent Agreement along with the address proof of the owner.
  • Latest Mobile & Email ID Required.

INFORMATION REQUIRED

  • Name and address of the firm.
  • Detailed Business Activities.
  • Capital contribution by each partner.
  • Duration.
  • Profit sharing ratio among the partners.
  • Routine Rights, responsibilities of each partner.
  • Method of operating Bank Account.
  • Time to time info sharing among partners.                                                                                                                                
  • Pan card
  • Partnership Deed
  • Partnership Certificate

Q1.      What is a Partnership?

Partnership is an agreement between two or more people to share the profits of a business. The business can be carried on together by all the partners or any one partner representing the others. A partnership can be for a fixed period of time or it may be limited to a specific project or it may be dissolved at will.

Q2.      What are the necessary elements that are required to form a partnership?

1. There must be an agreement between two or more persons.

2. The agreement must be to share the profits of the business.

3. All partners together, or any one, on behalf of the others must carry on the   business.

 

Q3.      What is the capital of a partnership firm?

Capital is the initial amount in cash or kind contributed by the partners to start the business. It is not necessary for each partner to contribute equally to the capital. Contribution is based on the agreement between the parties.

Q4.      Is a deed of partnership necessary?

It is not compulsory for a partnership deed to be in writing. Partnerships can also be oral.

Q5.      Who can be partners?

Partners must be major (above the age of 18), should be sane and should not be disqualified by law from entering into a contract.

Q6.      If i am partner in a firm, what are my rights?

1. To take part in the business.
2. To share the profit or loss of the business.
3. To inspect and make copies of the books of the firm.
4. To receive remuneration for taking part in the business if specified in the partnership deed.
5. To receive interest on capital if specified in the partnership deed.

Q7.      What are the duties as a partner in a firm?

1. Carry on the business.

2. be just and faithful to each partner.

3. Disclose true accounts of the firm.

4. Furnish full information of all things affecting the firm.

 

Q8.      What are the limitations as a partner?

1. Submit a dispute relating to the business to arbitration.

2. Open a bank account on behalf of the firm in your own name.

3. Compromise or relinquish any claim or portion of a claim of the firm.

4. Withdraw a suit or proceeding filed on behalf of the firm.

5. Enter into partnership with an outsider on behalf of the firm.

6. Acquire or transfer immovable property belonging to the firm.

7. Admit any liability in a suit or proceeding against the firm.

Q9.      What is Partnership at will?

If a partnership deed does not provide for duration or for dissolving the partnership in any manner, it is a Partnership at will.

Q10.    What are the requirements for registration of a partnership firm?

1. Name of the partnership firm.

2. Place of business of the firm.

3. Names of any other places where the firm carries on business.

4. Date of joining of each partner.

5. Name and permanent address of the partners.

6. Duration of the firm. The statement must be signed by all partners or by their agents specially authorised in this behalf.

Q11.    Can a new partner be admitted into the partnership firm?

A partner can nominate a successor to take his place in the event of death or retirement of the partner. The mode of introducing a new partner or successor is based on provisions in the partnership deed. A new partnership deed is required once the new partner is admitted into the firm.

Q12.    Can a firm become a partner in another firm?

A partnership firm cannot become a partner of another firm because it is not a legal person. However the partners may be partners in another firm in their individual capacity.

 

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