We register your Partnership in Hyderabad, Chennai,Coimbatore, Madurai, Erode, Trichy, Tirupur, Bangalore and Cochin.
The proprietorship form of ownership suffers a lot of issues by the lack of resources, unlimited liability and the limited skills. When planning to expand the business, it requires more investments, managerial skills and also the risk factor is too high. These requirements cannot be fulfilled by a single proprietor; this situation calls more number of persons from different area to start a business together. Here the partnership concept arises. For example, one person might have good technical as well as managerial skill but not enough amounts to capitally invest. Other one has more amounts for capital investment, but lack in managerial skills. In this case, both the persons can come together and combine their skills and capitals in order to organise the business. By overcoming all the disadvantages in a sole proprietorship, the partnership firm grows gradually.
Partnership referred as the relationship or the association between the members who carried on the business by sharing all the profits and losses. It can be expanded from the sole trade concern or by an agreement which is about the partnership between two or more persons in a desired manner. This will be best applicable if more no of capital and managerial skills needed. It is very distinct from the sole proprietorship. Even though, the concern is formed by more than two persons in the form of agreement; it’s not necessary that all the persons should manage the firm. One or more partners can run and manage the business on behalf of other partners.
The partnership initially found since because of getting better resources. This would not be possible in a sole proprietorship; the single one couldn’t raise more funds. When one or more persons join hands by pooling all their resources, the firm can be enhanced in a better way.
Not everyone having a same talent in terms of business. Some may good in certain functions. A single proprietor cannot look after the overall business activities all the time. So, when it comes to partnership firm, each partner will be assigned a particular function this leads to finish a work very quickly and efficiently. Partnership concept is always better than the sole proprietorship.
In a sole proprietorship, the risk factor will be too high to handle. Directly and indirectly it pressurise the person’s mind; whereas in partnership, the profits or losses, that would be shared equally to all the partners. The risk factor will be very low and also easy to override that when the persons work together.
It is definitely be a better place to avoid all the competitions and enmity when one or more sole proprietors work together. When standing opposite to each other, with the limited resources, they cannot grow well. But if they stand together, they can enhance their skills as well the firm.
A bigger business must avail the economies in order to distribute and for production. A victory of business purely depends on the scale of operations. Small business and a single proprietor scale of operation will be very small. But in partnership firm, the business obviously expands well; this will automatically increases the scale of operation.
Partnership arises because of the limitation which is in the existing sole proprietorship. The sophisticated machines could be handled by the person who has the better managerial skills in the case of partnership firm.
Partnership concept is well suited for small and medium concerns, since the requirement of finance is moderate. There may be a direct relationship between the work and the reward. Moreover, this should be supervised keenly by the concerned persons..
In some kind of business, it is necessary to directly contact with the consumer to promote our business well.
If the production increases, it obviously indicates that the scale of operation got increased. This would be possible when the investment is more. At the same time, management looks for the qualified persons to make the process more effective. Partners can separate the functional departments as per their need and work according to that.
The contract is the most important one in a partnership firm. Partnership only can be identified or recognised by a contract. For e.g. if a person died who was one of the partner in the firm; his son can claim the shares from the firm but he cannot become a partner in that firm unless he signed in a contract prior with the other persons concerned.
Similarly, a person from the Hindu Undivided Family carrying a business only by status and not by any legal agreement would not be considered as a partner. Thus, it clearly proves that partnership contract is the basic foundation for a firm.
As per Indian Partnership act 1932, it doesn’t mention anything about the maximum number of partners. But, in Companies Act, at least two members needed to be in partnership firm. In a banking sector business, the limitations in the number of partners are ten whereas in non-banking business, the maximum no of partners can be twenty. More than the limit will be considered as illegal.
In a widest sense, the business includes the small trade, occupation or a profession. The main thing is to carrying on the business activities being as a partner by the legal agreement.
When one or more persons want to share the income of the property among them but no partnership, they will not be considered as a partner since they haven’t carried the business activities.
Business should be carried by all the partners in a firm or else one or two partners can act on behalf of others. Mutual agency is a term which makes the partners to act both the agent and a principal; it enables all the partners to carry out their business on behalf of other partners.
This kind of concept purely depends and begins with the reliability, honesty and a faith amongst the partners.
If the asset of the partnership firm doesn’t meet the requirements and obligations for enhancing the firm, the private asset of the partner could be used for this purpose.
If any partner need to issue or transfer the shares from the firm to the outsiders, it would be restricted if he didn’t get the consent from the other partners.
It can be registered whether at the time of forming the firm or else afterwards with the Registrar of Companies (ROC) by submitting all the required documents.
Clauses to be included in the partnership deed:
The ultimate thing in partnership is sharing the profits by a business amongst all the partners. If one person tries to take all the profits, that will not be a partnership. Profits can be shared as per their contributed ratio or any ratio they like. There is an agreement between the partners for both the profits earned and the loss incurred by the business.
Partnership deed is a significant one for a partnership firm. This consists of all the essential details such as contribution for the capital, name of the business, modes and functionalities of business management, sharing of earned profits and incurred losses. It is a document which also contains the rights and liabilities of a partner which is prescribed by the management of the firm. This deed must be signed by all the partners.
In India, Partnership deed can be done either via writing or oral. But the most preferred thing is in terms of writing because dispute may occur if the agreed things not in the form of written agreement.
Application which is for the registration should be in the prescribed form.
Specimen of affidavit should be appropriately filed.
Rental agreement should be submitted where the business firm is located or any proof of ownership. Once, the registrar is satisfied with the documents which have been duly filed. He will issue a Certificate of Registration
Certain registrations are made compulsory for import and export of goods and services to and from India: For example, no person can import or export goods without getting an Importer-Exporter Code Number from regional licensing authority, unless he has been specifically exempted from obtaining the same. In other words, registration with the regional licensing authority.
