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What Is Partnership firm?

A Partnership Firm is a type of business constitution where businesses are owned, managed and controlled by a group of people with common interest for earning profits. Partnership firms are more famous amongst small and mid sized entrepreneurs due to its low operational cost and easily understandable structure.Partnership firms are regulated by the Indian Partnership Act, 1932.All the clauses of partnership deed are made in line of Indian Partnership Act, 1932 and Income Tax Act, 1961. There are two types of partnership firms, one is registered and second is unregistered partnership firm. Unregistered partnership deeds are the one which are executed on a stamp paper and simply notarised by a public notary.One can apply for a PAN card and open up a bank account on the basis of such unregistered partnership deed. Registered Partnership is the one which which is apart from being notarised also registered with the district magistrate of the area to to which the firm belongs.

Features of Partnership Firm
  • Easy to form
  • Minimum Compliances
  • Low Cost
  • High Cost of Conversion into Company

Package Inclusions

  • Drafting of Partnership Deed
  • PAN Card of Partnership Firm
  • TAN of Partnership Firm
  • Bank Account Opening Assistance

  • STEP 1
  • STEP 2
    Drafting of Deed
  • STEP 3
  • STEP 4
    Apply for PAN and TAN
We shall understand your requirements to draft the clauses of the partnership firm and complete the documentation
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Document and information Requirements for Partnership

  • 1 PAN Card of all Partners
  • 2 Address Proof of partners such as Aadhaar Card/ Voter identity card/ Passport.
  • 3 Proof of ownership OR rent/lease of the location of your business.(Electricity Bill/ Water Bill or Rent/Lease Agreement of Business Place)
  • 4 Profit Sharing Ratio
  • 5 Maximum Remuneration of Partners
  • 6 Initial Capital Contributions

Minimum Requirements of a Partnership Firm

  • Minimum 2 Partners
  • Initial Capital Contribution
  • Partner should be resident in India

Advantages of Partnership Firm

  • Easy to start

    An unregistered Partnership Firm is easy to start in comparison to private limited company.We just need to execute the deed on stamp paper and notarise it.

  • More Flexibilty with Drawings

    In a company, shareholders cannot withdraw their money or capital from the company until they pay corporate dividend tax which is 20% over and above 30% annual tax paid by the company. In case of firms partners are free to draw their the money anytime subject to the clauses and permissions set out in partnership deed,

  • No Mandatory Audit

    Under the Partnership Act, there is no provision to conduct the audit of the firm.But as per the Income Tax Act, if partnership from turnover exceeds Rs 2 Crores then it is required to conduct audit.For turnover less than 2 crores if profit is less than 8% of the Gross Receipts, then also audit will be conducted.

  • No ROC Compliances

    Unlike Companies, a partnership firm(Other than LLP) is not required to file any annual form or information with its registrar.It saves a lot of annual cost to partnership firms.

  • Doing Business As

    A partnership firm can operate in a name other than the name of its partners.With proper branding, It can maintain a separate identity from its partners.Also it has a separate PAN card from its partners.

Compliances not required on Partnership Firms

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