Quick Checklist
- Photograph of all the Partners
- PAN Card of all the Partners
- Self-Attested ID Proof of all Partners (Driving License/Passport/Voter ID)
- Electricity Bill or any other utility bill for the address proof of the Registered Office
Partnership
All you need to know
Partnership firm is a business structure in which two or more individuals manage and operate a business in accordance with the terms and objectives set out in the Partnership Deed. It is owned, managed and controlled by an Association of People for profit. Partnership firms are relatively easy to start and prevalent amongst small and medium-sized businesses in the unorganized sectors.
Partnership firms are created by drafting a Partnership deed amongst the Partners and by a registered Partnership deed, CA Agrawal Kanhere can help you to start a Partnership firm in India.
Wish to start a more formalised Firm? Get to know more on LLP Registration here.
Contents of Partnership Deed:
- The name of the firm
- Name and details of all partners
- Date of commencement of business
- Duration of the firm’s existence
- Capital contributed by each partner
- Profit/loss sharing ratio
- Interest on capital payable to partners
- The extent of borrowings each partner can draw
- Salary payable to partners, if any
- The procedure of admission or retirement of a partner
- The method used for calculating goodwill
- Preparation of accounts of the firm
- Mode of settlement of dues with a deceased partner’s executors
- The procedure to be followed in case disputes arise between partners
info@caagrawalkanhere.com is an eminent business platform and a progressive concept, which helps end-to-end incorporation, compliance, advisory, and management consultancy services to clients in India and abroad. Incorporating a Partnership Firm and registration of Partnership deed is easy, seamless, cheapest and quickest with info@caagrawalkanhere.com! Apart from a Partnership Firm, info@caagrawalkanhere.com also helps entrepreneurs with Private Limited Company Registration, Public Limited Company Registration, LLP Registration, HUF, One Person Company and Proprietorship Firm Registration easily. You may get in touch with our compliance manager on 07552761432 or email info@caagrawalkanhere.com for free query.
Compliance required for Partnership Firm
All you should know about partnership firm Compliance
GST Registration
Partnership firms in India requires GST registration. GST Registration Process is 100% online and there is no requirement of submission of physical documents to GST Department. GST registration must be obtained within 30 days of business incorporation, otherwise, the business will be subject to heavy penalties.
GST Return
Under the Goods & Service Tax regime which apparently rolled out in 2017, partnership firms having GST registration would be required to file GST returns. GST Returns can be filed monthly, quarterly and annual GST returns. As filing of GST returns is mandatory for all the registered Taxpayers including Partnership firms.
Accounting
The accounting for a partnership firm is essential compliance. Every Partnership firm shall maintain proper books of accounts which shall represent an accurate and fair view of the state of affairs of the Firm. In essence, a separate account tracks each partner’s investment, distributions etc.
Tax audit
The Income Tax audit would be needed for a partnership firm if the total sales turnover is more than Rs.1 crore during the financial year. In case of a professional firm, the tax audit would be necessary if total gross receipts exceed Rs.50 lakhs throughout the financial year under assessment.
IT Return
Income tax filing must be filed by all partnership firms. The income tax return of a partnership firm that doesn’t need an audit is due on the 31st of July. If the income tax return of a partnership firm is to be audited according to the Income Tax Act, then the return would be unpaid on the 30th of September.
TDS Return
Quarterly TDS returns must be filed by partnership firms that have TAN and are required to deduct tax at source as per TDS rules. A TDS Return is a quarterly statement which has to be submitted to the IT Department of India. It should contain all details of TDS deducted and deposited by you for a particular quarter.
Documents Required for Partnership
Benefits of Partnership Firm
Points to make your decision easy
No Minimum Capital
There are no restrictions as such with respect to the minimum capital requirement in case of partnership firm. The Partnership firm can be registered even with Rs. 10,000 as total capital.
Easy To Form
Partnership Firm is very easy to form. It comes into existence merely by a Partnership Deed. Its registration is not mandatory. Even after formation, there are no annual filings to be done except Income tax returns.
Large Resources
As a partnership firm requires a minimum of two partners, there’s an availability of larger resources be it financial resources or managerial resources as compared to a proprietorship firm.
Scalability
Its operations are scalable. Any new partner can be introduced only by executing a supplementary partnership deed. A partner can retire or can be removed by executing a similar deed.
Sharing Risks
On account of its very nature, Partnership firm enables sharing of risks by more than 1 person as the profit and losses are shared by all the partners. This ensures diversified financial risks.
Better Tax Planning
Partnership firm is a legal tool for better tax planning. The partnership firm is a separate entity and its tax is calculated separately so it can offer remuneration and interest to working partners.
How to register Partnership Firm?
5 Easy Steps
1
Complete a Checklist
2
Submit Documents
3
Verification of Documents
4
Drafting & Executing Partnership Deed
5
Obtain PAN & TAN
Fill a Simple Checklist
A Compliance Manager will get in touch with you to obtain your documents along with a simple checklist. You need to fill up that checklist and submit along with your documents for processing. Our expert team will verify documents and proceed with the formalities. All throughout the process, a Compliance Manager will keep you updated on the progress of Firm Registration.
Partnership Deed
Upon receipt of your documents, our team will draft a comprehensive partnership deed for your firm. A partnership deed contains very important details of address, commercial terms between partners, their remuneration, interest on capital and profit or loss sharing ratio. Partnership deed will be sent to you for your verification. Once you verify, we will get the same executed.
Firm Incorporated
Upon payment of stamp duty and notarizing, Once the registrar approves the application, the firm will be entered into the records. After registration, the Partnership firm will attain legal recognition. Once this is done, we will proceed to apply PAN and TAN for your firm. On receipt of PAN, you may proceed to open your firm’s current bank account with a bank of your choice.
FAQs On Partnership
Get answers to all your queries
A partnership firm is a business form in which two or more individuals manage and operate a business in accordance with the terms and objectives set in a Partnership Deed. This may or may not be registered.
A partnership must have at least two partners. A partnership firm in the banking business can have up to 10 partners, while those engaged in any other business can have 20 partners.
No, registration of a partnership is not necessary. However, for a partner to lodge a complaint or sue another partner or the firm itself, the partnership should be registered. Moreover, for the partnership to bring any suit to court, the firm should be registered. For small or family businesses, it is fine if a firm is not registered.
No, it is not mandatory to have a written Partnership agreement i.e. Partnership deed. However, it is always the best course to have a written document (partnership deed) instead of oral agreements.
Yes. The law presumes that each partner is an agent of the other and dealing in good faith with one partner binds the other partners as well.
