Partnership Firm

A firm or company established between two or more partners with the goal of earning profit is called as a Partnership Firm.It is not compulsory to register a partnership firm but there are added advantages if a partnership firm is registered.Partnership deed is the legal document which is created to form a partnership firm.

Indian Partnership Act 1932 is the governing law which regulates the partnership firms in India.As per the act “Partnership is the relation between persons who have agreed to share the profits of a business carried on by all or any of them acting for all”. Maximum number of members in a partnership is 10 for a banking business and 20 for other businesses to enter into a partnership firm.

Partnership firms are not separate legal entity while the partners are.A partnership firm can not be debtor or creditor and can not own a property.The property, debit or credit of a partnership firm is actually for the partners in the eyes of law.The manner in which profits or losses are to be shared amongst partners must be explicitly mentioned in the partnership deed to avoid any confusions in the future.Every partner can carry on business on behalf of others.

A partnership firm would be dissolved if the number of partners reduces below 2 in case of death,incapacitation or resignation of a partner.

You can register a Partnership firm just by following the steps mentioned below:
Visit BUSINESS CERTIFICATE Website
apply Now Fill up a simple form on our website providing basic information about proprietor and business to get Partnership Deed
Get this Deed printed on Stamp paper of specific value and get it registered with the help of any nearby Advocate/Registrar.

Minimum 2 are required and maximum 20 partners are allowed for a partnership firm.

Indian Partnership Act 1932 governs the partnership firms in India.

Section 39 of the Indian Partnership Act, provides that “the dissolution of the partnership between all the partners of a firm is called the dissolution of a firm.” It implies the complete break down of the relation of partnership between all the partners.

A partnership firm needs to pay income tax at 30% of total income. If the total income passes 1 crore then a partnership firm have to pay income tax surcharge on the amount of income tax at the rate of 12%.In addition to the income tax and surcharge, a partnership firm must pay education cess and secondary higher education cess. Education Cess is applicable on the amount of income tax and the applicable surcharge at the rate of 2%. Secondary and higher education cess is applicable on the amount of income tax and the applicable surcharge at the rate of 1%.

There is no limit on the minimum capital for starting a Partnership firm. Therefore, a Partnership firm can be started with any amount of minimum capital.

It is not necessary for Partnerships to prepare audited financial statements each year. However, a tax audit may be necessary based on turnover and other criterion.