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	<title>partnership firm Archives -</title>
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	<item>
		<title>How to Create Partnership Deed &#038; Register a Partnership Firm?</title>
		<link>https://www.thebuyt.com/how-to-create-partnership-deed-register-a-partnership-firm/</link>
					<comments>https://www.thebuyt.com/how-to-create-partnership-deed-register-a-partnership-firm/#respond</comments>
		
		<dc:creator><![CDATA[]]></dc:creator>
		<pubDate>Wed, 30 Mar 2022 12:50:56 +0000</pubDate>
				<category><![CDATA[Kaam Ki Baat]]></category>
		<category><![CDATA[partnership deed]]></category>
		<category><![CDATA[partnership firm]]></category>
		<guid isPermaLink="false">https://www.thebuyt.com/?p=4136</guid>

					<description><![CDATA[<p>The Buyt Desk  A partnership Firm needs less documentation for its formation and registration. The most important document which defines the partnership is the Partnership Deed. In India, Partnership and Proprietorship are the 2 forms of organizations that are comparatively easy to set up as they need very less statutory compliance as compared to LLPs [&#8230;]</p>
<p>The post <a href="https://www.thebuyt.com/how-to-create-partnership-deed-register-a-partnership-firm/">How to Create Partnership Deed &#038; Register a Partnership Firm?</a> appeared first on <a href="https://www.thebuyt.com"></a>.</p>
]]></description>
										<content:encoded><![CDATA[<p><strong>The Buyt Desk </strong></p>
<p dir="ltr">A partnership Firm needs less documentation for its formation and registration. The most important document which defines the partnership is the Partnership Deed.</p>
<p dir="ltr">In India, Partnership and Proprietorship are the 2 forms of organizations that are comparatively easy to set up as they need very less statutory compliance as compared to LLPs and companies. Hence these are the most popular forms that new entrepreneurs opt for to run their business.</p>
<h4 dir="ltr">How should a Partnership Firm be Named?</h4>
<p dir="ltr">The name of the partnership firm can be anything as per the choice of the partners but should take care of a few things like</p>
<ul>
<li dir="ltr">
<p dir="ltr" role="presentation">The chosen name should be unique and not identical to the name of any other firm running a similar business. There should not be identical crises.</p>
</li>
<li dir="ltr">
<p dir="ltr" role="presentation">The firm name is not allowed to have words like Emperor, Empire, Crown, Empress or words that imply the approval, sanction or patronage of the government.</p>
</li>
</ul>
<h4 dir="ltr">How to draft a Partnership Deed?</h4>
<p dir="ltr">A partnership deed is a legal document that states every member of a partnership&#8217;s rights and obligations. This deed can be oral or written but oral agreement is of no use when it comes to taxation. A written deed is necessary and its fundamental characteristics are</p>
<ul>
<li dir="ltr">
<p dir="ltr" role="presentation">Firm’s name and address</p>
</li>
<li dir="ltr">
<p dir="ltr" role="presentation">Each partner’s name and address</p>
</li>
<li dir="ltr">
<p dir="ltr" role="presentation">Nature of business under this partnership</p>
</li>
<li dir="ltr">
<p dir="ltr" role="presentation">Firm’s Date of Commencement</p>
</li>
<li dir="ltr">
<p dir="ltr" role="presentation">Term or duration of Partnership</p>
</li>
<li dir="ltr">
<p dir="ltr" role="presentation">The capital amount put in by each partner</p>
</li>
<li dir="ltr">
<p dir="ltr" role="presentation">The profit-sharing ratio between the partners</p>
</li>
</ul>
<p dir="ltr">These are the bare minimum and must, partners can add more clauses as per the need so that role of every partner is clear and there are no conflicts among partners. Here are a few more –</p>
<ul>
<li dir="ltr">
<p dir="ltr" role="presentation">Interest in Partner’s Capital</p>
</li>
<li dir="ltr">
<p dir="ltr" role="presentation">Partners’ Loan and interest to be charged on withdrawals</p>
</li>
<li dir="ltr">
<p dir="ltr" role="presentation">Payable salaries and commissions to partners</p>
</li>
<li dir="ltr">
<p dir="ltr" role="presentation">Accounts management and auditing</p>
</li>
<li dir="ltr">
<p dir="ltr" role="presentation">Clear classification of each partner’s duties, powers and obligations</p>
</li>
<li dir="ltr">
<p dir="ltr" role="presentation">Procedures to be followed on any partner’s retirement or death and admission of a partner</p>
</li>
</ul>
<p dir="ltr">There can be many more clauses beyond these too. It all depends on the partners. Every rule they set to run the business can be added as a clause to the partnership deed. As per the Indian Stamp Act, select the needed stamp paper to put the Partnership Deed drafted by the partners on it. All partners are needed to sign the deed along with a minimum of two witnesses. If you want the firm to be registered, then file a copy of the <a href="https://www.thebuyt.com/what-is-a-partnership-firm-and-its-5-fundamental-features/">partnership deed with the Registrar of Firms</a>.</p>
<h4 dir="ltr">How to register a Partnership Firm?</h4>
<p dir="ltr">In India, partnerships are administered by the Indian Partnership Act, 1932. According to this act, registration of partnership firms is not mandatory and is left to the will of partners. To enjoy the benefits of registered firms, it is necessary to register same. This can be done anytime during the lifetime of the partnership firm. Only registered partnership firms can file court cases. In India, a partnership firm’s registration is hassle-free. Find the Registrar of Firms of the area where the business is established and submit the application along with fees and supporting documents to register the firm. The supporting documents are</p>
<ul>
<li dir="ltr">
<p dir="ltr" role="presentation">Registration of Partnership application Form No. 1</p>
</li>
<li dir="ltr">
<p dir="ltr" role="presentation">The Partnership Deed &#8211; certified copy</p>
</li>
<li dir="ltr">
<p dir="ltr" role="presentation">Duly filled specimen of Affidavit</p>
</li>
<li dir="ltr">
<p dir="ltr" role="presentation">Address proof of business location &#8211; Ownership document or rental/lease agreement</p>
</li>
</ul>
<p dir="ltr">All the documents must be signed by all the partners. The registrar shall verify and record an entry of the statement in a register called the Register of Firm. Then the Certificate of Registration is issued. This is just the registration of the firm. Registration with the Income Tax Department is a must for every partnership firm and thus having a PAN Card in the firm&#8217;s name. Once a PAN Card is generated, the Partnership Firm can have a Current Account in the name of the Partnership Firm in any financial institute for day to day business operations.</p>
<p>The post <a href="https://www.thebuyt.com/how-to-create-partnership-deed-register-a-partnership-firm/">How to Create Partnership Deed &#038; Register a Partnership Firm?</a> appeared first on <a href="https://www.thebuyt.com"></a>.</p>
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			</item>
		<item>
		<title>What is a Partnership Firm and its 5 Fundamental Features?</title>
		<link>https://www.thebuyt.com/what-is-a-partnership-firm-and-its-5-fundamental-features/</link>
					<comments>https://www.thebuyt.com/what-is-a-partnership-firm-and-its-5-fundamental-features/#respond</comments>
		
		<dc:creator><![CDATA[]]></dc:creator>
		<pubDate>Fri, 25 Mar 2022 05:06:10 +0000</pubDate>
				<category><![CDATA[Kaam Ki Baat]]></category>
		<category><![CDATA[partnership firm]]></category>
		<guid isPermaLink="false">https://www.thebuyt.com/?p=4114</guid>

					<description><![CDATA[<p>The Buyt Desk  Partnership firms are most common in India after proprietorship. Understand what a partnership firm is and its fundamental features before joining one as a partner. A partnership firm is formed by two or more individuals known as Partners. Partners come together to carry out a business under the name of the partnership [&#8230;]</p>
<p>The post <a href="https://www.thebuyt.com/what-is-a-partnership-firm-and-its-5-fundamental-features/">What is a Partnership Firm and its 5 Fundamental Features?</a> appeared first on <a href="https://www.thebuyt.com"></a>.</p>
]]></description>
										<content:encoded><![CDATA[<p><strong>The Buyt Desk </strong></p>
<p dir="ltr">Partnership firms are most common in India after proprietorship. Understand what a partnership firm is and its fundamental features before joining one as a partner.</p>
<p dir="ltr">A partnership firm is formed by two or more individuals known as Partners. Partners come together to carry out a business under the name of the partnership firm. A partnership is not a distinct legal entity but is about partners. It is just a name given to the compositions of partners. The asset/property under the firm&#8217;s name are legally assets of partners as per the percentage in the partnership deed. Just to ease the taxation process, the partnership firm is considered as an entity distinct from the partners forming it. But for the rest of the laws, it is not firm but partners composing it as a partnership firm are not a separate legal entity on its own.</p>
<h4 dir="ltr">Definition of Partnership</h4>
<p dir="ltr">In India, Partnership Firms are governed by the Indian Partnership Act, of 1932. Indian Partnership Act, Section 4 defines Partnership as, “Partnership is the relation between persons who have agreed to share the profits of a business carried on by all or any of them acting for all”. This definition clearly indicates the five fundamental features of partnership that is: (1) A contract or deed (2) between two or more people (3) who carry on a business on common grounds (4) with the intention of sharing profits and (5) all partners can run the business or one or few acting for all.</p>
<h4 dir="ltr">5 fundamental features of a Partnership Firm</h4>
<p dir="ltr">All the 5 elements mentioned in the definition must exist together to form and run a partnership. If anyone feature is missing, there cannot exist a partnership. Here these 5 elements are explained in detail.</p>
<ol>
<li dir="ltr">
<p dir="ltr" role="presentation"><strong>Contract for Partnership</strong></p>
</li>
</ol>
<p dir="ltr">The partnership comes into existence only after a contract is signed by all partners. It does not come into existence through inheritance, status or operation of law. For example: In the partnership firm, after the death of a partner, the partner&#8217;s son can only claim the parent&#8217;s share in the partnership property but cannot become a partner by default. He can enter into the partnership firm only through a contract for the same with all other partner’s concerns. Two people running a business cannot be called partners until there is a contract for their partnership. The contract is the base of the partnership firm.</p>
<ol start="2">
<li dir="ltr">
<p dir="ltr" role="presentation"><strong>The Maximum No. of Partners in a Partnership is 20 and the minimum is 2</strong></p>
</li>
</ol>
<p dir="ltr">2 people are required to comprise a partnership and the maximum number clause is not described in the Indian Partnership Act. The Companies Act describes the business as illegal if the partnership is of more than 10 people for banking business and more than 20 people for any other business. If authorized by the company&#8217;s Memorandum of Association, a company can enter into a contract of partnership.</p>
<ol start="3">
<li dir="ltr">
<p dir="ltr" role="presentation"><strong>Running Business in a Partnership</strong></p>
</li>
</ol>
<p dir="ltr">All the parties/partners should <a href="https://www.thebuyt.com/five-tips-to-help-you-make-mour-financial-plan/">agree to carry on a business</a>.  The business can be anything from trade, occupation to the profession. The charitable work will not be a partnership. Only when the firm is doing business can it be called partnership and people in the contract as partners.</p>
<ol start="4">
<li dir="ltr">
<p dir="ltr" role="presentation"><strong>Sharing of Profits</strong></p>
</li>
</ol>
<p dir="ltr">The fundamental idea of a partnership firm is to share the profits among partners earned by running the business. If the intention of running the business is not to make profits, then it is not legally considered a partnership. All the partners should share the profits in whatever ratio agreed. If anyone is not entitled to profit then he/she is not a partner in the partnership. But it is not necessary for all partners to share losses, one or few can agree to bear all the losses. Whatever the partners agree on should be mentioned in detail in the partnership contract/deed. If not mentioned, it will be shared equally among all partners.</p>
<ol start="5">
<li dir="ltr">
<p dir="ltr" role="presentation"><strong>Mutual Agency in a Partnership</strong></p>
</li>
</ol>
<p dir="ltr">The partnership demands all partners or one /few partners on behalf of all to run the business. The partnership must be a mutual agency of partners. All partners are bound by the acts of every other partner. Mutual agency permits every partner to run the business on behalf of other partners.</p>
<p>The post <a href="https://www.thebuyt.com/what-is-a-partnership-firm-and-its-5-fundamental-features/">What is a Partnership Firm and its 5 Fundamental Features?</a> appeared first on <a href="https://www.thebuyt.com"></a>.</p>
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