Service Details

What is a Partnership Firm?

A Partnership Firm is an organization that is formed with two or more persons to run a business and divide the profits thereof in an agreed ratio. Each member of a group is called a partner and collectively known as a partnership firm. The Partnership firms are governed by an Indian Partnership Act, 1932. The firm is easy to form and the compliance is minimal as compared to companies. Incorporation of Partnership in India are governed by the Indian Partnership Act, 1932 and as per the act a partnership deed may be registered or unregistered.

Benefits of Partnership Firm :

  • Less compliance
In terms of compliance, the requirements are very less which makes it popular among people. In Partnership Firms, it is not essential to file any annual returns, and the financial statements of a partnership firm would not be made publicly available. At the same time, the accounts of a registered partnership firm are not required to be audited.
  • Easy to start
Generally a partnership can be started with an unregistered deed of the partnership within 2-4 business days. Furthermore, having registered for the same has its own perks. The main benefit of having a registered firm will allow you to book lawsuits in courtrooms against other business associates or the business in the firm for the administration of rights addressed in the Partnership Act.
  • Budget-friendly -
The OPC business helps the startup entrepreneurs to test their business models, and build up a marketable product, to approach venture capitalists for funding and easily convert OPC into a multi shareholder Private Limited company.

Documents Required to register a Partnership Firm :

Form No. 1 - Application for registration under Partnership Act

Affidavit mentioning intention to become a partner

Lease or rental agreement of the property/building where the business is set up

Address proof of the partners which includes PAN card, Aadhar card, Voter ID, driving licence.

Partnership Registration Process:

  • Application of DIN & DSC

The registration of partnership deed can be done orally or in written format. However, an oral agreement is of no use when the firm has to deal with tax. Some necessary characteristic of a partnership deed is:-

  • →   Name of the firm
  • →   The name and the address of the partners
  • →   Nature of a business
  • →   True rights of the partners
  • →   Various duties of the partners
  • →   The amount of capital to be contributed by each partner
  • →   The drawings that can be made by each partner
  • →   The way used for calculating goodwill
  • →   Profit and the loss-sharing ratio

FAQs

Who can be registered with an OPC?

OPC company registration can be done only by Resident Person. The term “Resident Person” here means a person who has stayed in India for a period of not less than 182 days during the immediately preceding financial year. Criteria of 180 days have been reduced to 120 days to allow Non-Resident Indians to operate OPCs in India and enjoy the unlimited benefits of a One Person Company (OPC).

The capital to start your own OPC is around 1 Lakh, but no need to be paid-up. So, this means you actually don’t need any investment to begin your business.

There are no tax benefits available as the tax rate is flat 30%,.

No not at all, you can show your rented home or own residential address as the registered office address of the company.

Nominee is the person who acts as legal heir of the business after any demise or incapacity of Director.

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