A Partnership Firm is governed by ‘The Partnership Act 1932’ and involves two or more Individuals who enter into an agreement to carry on a specified business. Unregistered Partnerships involves no separate registration and can be formed easily with lesser legal compliances compared to other corporate entities. Although a partnership firm’s registration is optional, the partners may opt for the registration which provides a legal edge over the unregistered partnership.
A partnership firm is registered state-wise under the Registrar of Firms and Societies. The partnership deed is the most crucial document which governs the partnership. In an unlimited partnership firm, every partner is liable jointly with all the other partners for all acts of the firm. Alternatively, one can also opt for LLP which reduces the liabilities of the partners.
A partnership firm can be formed easily by the partners after entering into a Partnership Agreement. A well-drafted written agreement should clearly define the responsibilities and liabilities of all the partners.
A partnership firm is not compulsorily required to be registered under any law. Hence, there are lesser compliances which are required to be complied with during the normal course of business.
Each partner is personally liable for the losses of a partnership firm, which is a concern in partnerships since every partner is liable for the acts of the other partner.
A Partnership is formed through an agreement among the partners. A written agreement serves as a primary record of the terms and conditions of a partnership.
Which type of partnership is required, Registered or Unregistered Partnership?
A deed is drafted post discussion on risk and responsibilities
Each partner should sign and approve the agreement.
Partners may get the partnership registered
No, the registration of partnership firm is optional, but for legal prospects, an agreement is required to be executed between the partners describing the terms of the partnership.
A minimum of 2 Partners, who are individuals are required to start a partnership firm.
Yes, every partner is jointly liable with all the other partners and also severally liable for all acts of the firm done during the tenure of his partnership
Indian Partnership Act, 1932 has put no limitations on maximum numbers of partners in a firm.
Another Partnership firm cannot be a partner in a firm as it's not an individual.
Partnership firm gets dissolved as per the terms of the agreement if executed or as decided between the partners at the time of formation.
In order to form a partnership firm, a written partnership deed is not compulsory, but it is better to draft the document. It is prudent to have a partnership deed for dealing with banks, income tax authorities, and clients. Also, a written partnership deed will help as a reference in case of any disputes or issues among the partners.
In partnership, there is no restriction on the citizenship of the partner. Any non-Indian citizen can be a part of the Indian partnership firm subject to certain approvals.
In India, under the Indian Partnership Act, 1932, a minor cannot become a partner but can be admitted to the benefits of the partnership firm. However, with the consent of other partners, he can share profits of the firm and also have access to the books of accounts of the firm.
Bhanu is a person to count upon, with his expertise in his domain and knowledge he brings on you can reach him with a problem any time. His appetite to listen and understand the issue makes him the man for the job. He is proactive, energetic and a resourceful guy. My best wishes to Bhanu and Startup seven for future endeavour.
Founder at Addensure Media LLP
Startup Seven is perfect to partner with in your startup or corporate journey. Seamless service and support provided by team is really helpful specially when you are trying to setup your venture. I would like recommend Startup Seven to every startup.
Founder Onmytap - NETWORK FOR PROFESSIONAL GROWTH
Bhanu is one of the most sincere and trustworthy person I have come across. He is extremely ethical and is completely customer focused. His hard work and dedication is commendable and with him handling the legal as well as taxation things are always in order and compliant. Keep up the good work Bhanu. Wishing you more and more success as you grow.
Co-founder, Executive - Brightsandz Clean Tech Pvt Ltd