Online Partnership Firm Registration in Bangalore
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Partnership Firm Registration
A partnership firm is an organization which is formed with two or more persons to run a business with a view to earn profit. Each member of such a group is known as partner and collectively known as partnership firm. These firms are governed by the Indian Partnership Act, 1932.
Following are the characteristics of Partnership Firm:
2. Contractual relationship: A written agreement known as partnership deed which is signed by all the partners, binds them in a contractual relationship.
3. Voluntary Registration: Registration of partnership firm is not compulsory. Since the registration provides various benefits to the firm thus it is desirable.
4. Competence of Partners: Every partner must be competent enough to enter into the partnership agreement. He should not be minor (in some cases minor can be admitted only to the benefits of the partnership), lunatic or insolvent.
5. Sharing of Profit and Loss: In partnership firm all the profits and losses are shared by the partners in any ratio as agreed. If it is not given then they share it equally.
6. Unlimited Liability: Liability of partners of a partnership firm is unlimited. They are jointly held liable for the debts and losses of the firm.
7. Legal Status: Partnership firm has no distinct legal status separate from its partners.
8. Transfer of Interest: No partner can transfer its interest in the firm to anybody without the consent of other partners.
9. Principal – Agent Relationship: This relationship is based on mutual trust and faith among the partners in the interest of the firm. Business of the firm may be carried on by all the partners or any one of them acting for all. According to this, every partner is an agent when he is working on behalf of other partners and he is the principal when other partners act on his behalf.
Required Documents for registering a company:
ID Proof of Directors
(Driving License/ Voter ID/ Passport)
Address Proof of Directors
Aadhaar and Pan of Directors
Rental Agreement & Utiliy Bill
(For registered address of company)
Advantages & Disadvantges Of The Partnership Firm:
Advantages of Partnership Firm:
1. Easy Formation: Registration is not compulsory in the case of Partnership firm. It can be formed without any legal formality and expenses. Thus they are simple and economical to form and operate.
2. Larger Resources: Due the more number of members the partnership firm has larger resources for the business operations as compared to sole proprietorship.
3. Flexibility in operation: Due to the limited number of partners there is flexibility in the operations of business as the partners can amend any objectives or change any operations any time by mutual consent.
4. Better Management: Business of a partnership firm is very well managed by all the partners as they take interest in the daily affairs of business because of the ownership, profit and control.
5. Sharing of Risk: In partnership every partner bears the risks individually as it is easier compared to sole proprietorship.
6. In a partnership firm interest of every partner is protected against any fraud.
Disadvantages of partnership Firm:
1. Instability: A partnership firm does not exist for an indefinite period of time. The death, insolvency or lunacy of a partner may lead to dissolution of the partnership firm.
2. Unlimited Liability: Liability of every partner in a partnership firm is unlimited as any of the partners may be called upon to pay all the debts even from its personal properties. A single wrong decision by one partner can lead other partners in heavy losses and liabilities.
3. Lack of Harmony: According partnership agreement every partner has equal rights. Some situations might occur in which one or the other partner will not agree on the same thing which will cause difference of opinion resulting mistrust and disharmony among the partners.
4. Limited Capital: Due to the restriction on the maximum number of members, a limited amount of capital can be raised.
5. No legal status: A partnership firm does not have a legal status like a Joint Stock Company.
6. In a partnership firm it is not easy to transfer ownership. Consent of every partner is required in order to transfer ownership