What is Partnership Registration?
A Partnership is a business structure in which two or more individuals manage and operate a business in accordance with the terms and goals set out in the PartnershipDeed. Partnership registration is relatively easy and is prevalent among small and medium sized businesses in the unorganized sectors. Partnership Registration is done through Pksoftech Private Limited. For Partnership Registration, you must agree on a firm name and then establish a partnership deed. It is a document stating respective rights and obligations of the partners and to be valid it should be written and not oral. The terms of the Partnership Deed can be varied to suit the interests of the partners and can even be made contrary to the Indian Partnership Act, 1932 but if the Partnership Deed is silent on any point, then the provisions of the Act would apply.
+ Agreement of between persons desiring to form partnership whether oral or written,
+ The object of the agreement is to share the profits of the business, and
+ The intended business must be carried on by all the partners or by any of them acting for all of them.
A partnership firm is best for small businesses that plan to remain small. Low costs, ease of setting up and minimal compliance requirements make it a sensible option for such businesses. Registration is optional for General Partnerships. However, for larger businesses, it has lost its relevance with the introduction of the Limited Liability Partnership (LLP). This is because an LLP retains the low costs of a partnership while providing the benefit of limited liability, which means that partners are not personally liable for the debts of the business.
Why Partnership Firm?
There is no prescribed any minimum capital requirement for obtaining registration allowing small businesses to reap the benefits of a registered partnership.
A registered partnership is considered as more credible for borrowing purposes than an unregistered partnership.
One of the registering partnership that it easy to change the legal structure.
Only a registered partnership has the right to sue the third party whereas the third party can sue irrespective of registration & therefore can claim set off. Also, a partner of an unregistered partnership cannot sue the firm for enforcing any rights given under the partnership act.
Partners share the decision making and can help each other out when they need to. More partners mean more brains that can be picked for business ideas and for the solving of problems that the business encounters.
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.
Partners can share the responsibility of the running of the business. This will allow them to make the most of their abilities. Rather than splitting the management and taking an equal share of each business task, they might well split the work according to their skills and the risk is also shared among partners.
A Partnership is easy to form as no cumbersome legal formalities are involved Registration is not compulsory in the case of the Partnership firm. It can be formed without any legal formality and expenses. Thus, it is simple and economical to form and operate.
General Partnerships do not need to appoint an auditor or, if unregistered, even file annual accounts with the registrar. Annual compliances are also fewer as compared to an LLP. General Partnerships do need to file Income Taxes and, depending on turnover, service and sales tax.
A General Partnership is cheaper to start than an LLP and even over the long-term, thanks to the minimal compliance requirements, it is inexpensive.