Partnership Registration

WHAT IS A PARTNERSHIP FIRM?

The partnership is a common form of business.Partnership Registration, Two or more people come together to carry on a business and share the profits and losses. The liability of the partners in a partnership firm is joint and several.

A partnership firm is not a separate legal entity distinct from its members. It is merely a collective name given to the individuals composing it. Hence, unlike a company that has a separate legal entity distinct from its members, a firm cannot possess property or employ servants, neither it can be a debtor or a creditor. It cannot sue or be sued by others.

partnership firm

CHARACTERISTICS OF PARTNERSHIP FIRM

Existence of an Agreement

A partnership is an outcome of an agreement between two or more persons to carry on business. This agreement may be oral or in writing. The partnership act, 1932(Section5) clearly states that” the relation of partnership arises from contract and not from status.

Existence of Business

The partnership is formed to carry on a business. As stated earlier, the Partnership Act. 1932(Section 2 (6))states that a “include every trade, occupation, and profession”

Contractual Relation

The person Joining the partnership enters into a contract for running the business. According to Partnership Act, The relation of partnership arises from contract and not from status. The contract may be oral or written agreement is made because it helps to settle the disputes if they arise later on.

Registration of Firm

Registration of a firm is not compulsory under the act. The only document or even an oral agreement among partners required is the partnership deed to bring the partnership into existence.

Nature of Liability

The nature of liability of a partner is the same as in the case of a sole proprietorship. The liability of partners is both individual and collective. The creditor has a right to recover the firm’s debts from the private property of one or all partners where the firm’s assets are insufficient.

Non-transferability of interest

No partner can assign or transfer his partnership share to any other person so as to make him a partner in the business without the consent of all other partners.

ADVANTAGES OF Partnership Registration

Larger resources

More resources can be procured from all the partners when compared to sole proprietorship.

Easy to form

A partnership firm is easy to form. An oral or written agreement between the partners is all that is needed to start a partnership.

Better Management

Better management of the business can be done as the number of persons managing the business are more.

Ensures secrecy

The statement of accounts of the firm need not be published and this ensures secrecy.

DISADVANTAGES OF PARTNERSHIP FIRM

Limited number of partners

Due to the limited number of partners, there is flexibility in the operations of the business as the partners can amend any objectives or change any operations any time by mutual consent.

Cannot access public funds

A partnership firm cannot invite funds from public.

Limited number of partners

Due to the limited number of partners, there is flexibility in the operations of the business as the partners can amend any objectives or change any operations any time by mutual consent.

Separate legal status

A partnership firm does not have a separate legal status i.e., a firm cannot own property.

Unlimited liability

Limited liability concept does not apply in the case of a partnership firm. All the partners are jointly and severally liable for the liabilities of the firm.

PROCESS FOR PARTNERSHIP FIRM REGISTRATION ONLINE IN JAIPUR

Draft a partnership deed

A deed of partnership is required to be made out and registered under the Indian movable property Act together with other movable properties.

Fill Form 1

This is the Prescribed Registration Form for Incorporation of a firm. It should be filled and along with documents to be submitted to ROF

Submission

Submit the duly filled Form 1, stamped partnership deed and Lease agreement to RoF(Registrar of Firms)

Certificate of registration is issued by RoF

After verification of all Submitted documents, RoF will issue Certificate of Registration

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