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Partnership Firm

Partners are bound to carry on the business of the firm to greatest common advantage, to be just and faithful to each other, and to render true accounts and full information of all things affecting the firm to any partner, his heir or legal representative. Subject to the contract between the partners, the property of the firm shall be held and used by the partners exclusively for the purposes of the business. Where no provision is made by contract between the partners for the duration of their partnership, or for the determination of their partnership, the partnership is “partnership-at-will”.

Advantages

Capital

The partners can bring a fund as capital. The profit is shared based on the capital brought by the Partners.

Shared Responsibility

Partners can share the responsibility of the running of the business. This will allow them to make the most of their abilities. Rather than splitting the management and taking an equal share of each business task, they might well split the work according to their skills. So if one partner is good with figures, they might deal with the book keeping and accounts, while the other partner might have a flare for sales and therefore be the main sales person for the business.

Flexibility

A partnership is generally easier to form, manage and run. They are less strictly regulated than companies, in terms of the laws governing the formation and because the partners have the only say in the way the business is run (without interference by shareholders) they are far more flexible in terms of management, as long as all the partners can agree.

Decision Making

Partners share the decision making and can help each other when they need to. More partners mean more brains that can be picked for business ideas and for the solving of problems that the business encounters.

Benefits of Registered Partnership Firm

Power to file File case by Partner

Any partner can file a case against partner or Firm in case any dispute arises between the partners. This power is not available in unregistered Firm.

Power to file File case by Firm

The partners of a Firm can file a case in court against any third parties e.g to recovery the price of the goods supplied. Unregistered Firm cannot file suit against third party.

Power to Claim Setoff

A registered Firm can be set off the amount payable to third party and amount receivable from third party. Such a power not available in unregistered partnership Firm

Death of a Partner (Sec. 35):

Although on the death of a partner a firm is dissolved, but if the other partners so agree the firm may not be dissolved [Sec. 42 (c)]. Where a firm is not dissolved, the estate of a deceased partner is not liable for any act of the firm done after his death. His estate is liable only for liabilities undertaken during his life time. No public notice of death is required to relieve the deceased partner’s estate from future liabilities.

It is important to note that the provisions of Section 36 (Restrictions imposed on retiring partner) and Section 37 (Right of retiring partner to share subsequent profits in certain cases), which have been discussed under the heading ‘Retirement of a Partner,” are also applicable when partner ceases to be a partner by expulsion, insolvency or death.

SERVICE TAX STATUTORY OBLIGATIONS

For all those who have a liability to register themselves, if fails to do the same than under section 75A of the finance act 1994 penalty for the failure of an assessed to get himself registered was fixed at Rs. 500/- as a onetime payment but subsequently this section was deleted by the virtue of the finance act 2004 and now the general penalty that is applicable is Rs. 1000/- as per section 77 of Finance act.

Documents required

  • 1

    Documents for Company

    • PAN
    • Rental Agreement
    • Bank Statement
    • EB receipt
    • Resolution Copy in case of Company
  • 2

    Documents for Owners

    • PAN
    • Voter ID / Passport/ Driving License / Aadhar Number
    • Photo – 2 Nos
    • ATTESTATION
    • Documents to be attested
  • 3

    REGISTRATION

    • ST-2 will be issued by the department.

Business Plan

Basic

Rs.4,599/-

  • Partnership Deed Preparation

Standard

Rs.7,899/-

  • Partnership Deed Preparation
  • Registration

Advanced

Rs.11,899/-

  • Partnership Deed Preparation
  • Registration
  • Service Tax Preparation

HOW LONG DOES IT TAKES?

1 DAY

Documents verify by the expert

1-2 WORKING DAYS

Service tax return Finalized Statement

1-2 WORKING DAYS

Service Tax Filing

2-3 WORKING DAYS

Service Tax Return Acknowledgment

Frequently Asked Questions

What is a Partnership?
Partnership is an agreement between two or more people to share the profits of 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.
I am not a citizen of India. Can I be a partner in an Indian firm?
A partnership firm can be dissolved at any time if all the partners decide to dissolve it. This is known as dissolution by consent.
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.
Is a deed of partnership necessary?
It is not compulsory for a partnership deed to be in writing. Partnerships can also be oral.
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.
I have a minor son. Can he be a partner in my partnership firm?
No, a minor cannot become a partner. However, your minor son can be admitted to the benefits of the partnership firm. He can share the profits of the partnership business with the consent of the other partners. He can also access, inspect and copy the accounts of the firm. Though the minor is not personally liable for the losses of the firm, his share in the partnership business is liable for the losses incurred.
Can a minor admitted to the benefits of partnership, become a partner on attaining majority?
A minor admitted to the benefits of partnership, has the option to become a partner within six months of attaining majority. He has to give a public notice stating his acceptance or rejection of partnership. In the absence of a notice, it is considered that he has become a partner of the firm.
What is Partnership at will?
If a partnership deed does not provide for a duration or for dissolving the partnership in any manner, it is a Partnership at will.
Can a partner transfer his right in the business of the firm to an outsider?
Yes, a partner can transfer his interest in the business to an outsider, but only with the consent of all other partners.
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.
What is dissolution of partnership by consent?
A partnership firm can be dissolved at any time if all the partners decide to dissolve it. This is known as dissolution by consent.
Is a public notice necessary for the dissolution of the firm?
Yes, it is necessary to give a public notice at the time of dissolution. Otherwise, the partners remain liable to third parties for their actions, even after the dissolution. However, public notice is not necessary in case of : a. Deceased partner b. Insolvent partner c. Partner who is not known to be a partner and who has retired.

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