Choose Your Plan
A Partnership Firm is a popular form of business constitution for businesses that are owned, managed and controlled by an Association of People for profit. Partnership firms are relatively easy to start are is prevalent amongst small and medium sized businesses in the unorganized sectors. With the introduction of Limited Liability Partnerships in India, Partnership Firms are fast losing their prevalence due to the added advantages offered by a Limited Liability Partnership.
There are two types of Partnership firms, registered and un-registered Partnership firm. It is not compulsory to register a Partnership firm, however, it is advisable to register a Partnership firm due to the added advantages. Partnership firms are created by drafting a Partnership deed amongst the Partners and we can help start a registered or un-registered Partnership firm in India.
- Easy Formation: It was very easy to form any partnership firm. Like LLP and other corporate business, it does not require much legal formality during incorporation of partnership firm. It is not necessary to get the firm registered. To start a partnership firm, you need to do a deed that can be oral or written. There are few states of India which makes mandatory for registration of Partnership Firm. In some states registration is not required; you have to only do a partnership Deed
- Larger Resources: Due to the more number of members, the partnership firm has larger resources for the business operations as compared to the sole proprietorship. As there are multiple partners in a partnership firm, they can use their knowledge and experience to expand their partnership business.
- Sharing of Risk: One of the most significant advantages of the partnership firm is that the risk gets equalized in all the partners. As there are multiple partners in a partnership, so the risk gets balanced.
- No Annual Returns: There is no need to submit an annual return to the Ministry of Corporate Affairs. If we compare partnership firm with Limited Liability Partnership, then we do not have to file an annual return in the Partnership firm to the ministry of Corporate Affairs, while we have to fulfill many compliance in the Limited Liability Partnership.
- Higher Contribution of Capital: A partnership firm can raise the higher contribution of capital because of its higher number of partners. It can raise contribution easily because there are multiple partners available for donation. Multiple partners can also get various loans from the bank so it will help you in many ways.
- No Statuary Audit: One of the significant advantages of a Partnership firm is, there is no requirement of Statuary Audit. Therefore a Partnership Firm is not required to get its books of account audited. You may have to check your book of mind if there is any requirement of Income Tax Act. Sometimes it is required by the Income Tax Department.
- Winding Up: In a partnership firm, it is very simple to winding up of Partnership Firm. Partners of Partnership Firm can enter into a dissolution deed anytime, or they can also make a clause of winding up in Partnership deed so it will wind up accordingly. In a partnership firm, there is a decidedly less legal process for winding up.
- Flexibility in Operation: One of the benefits of the Partnership firm is that it is a bit flexible because you do not have to complete much legal formality until it is completed from its beginning. Operation of Partnership would be very flexible as the partner can increase or decrease the area of their business without any legal formality. The owners of the partnership firm are partners, so it is easy for them to take any decision. Decision making in partnership is easy as compared to other corporate entity.