Partnership firm registration
A Partnership is a business structure in which two or more individuals manage and operate a business in accordance with the terms and objectives set out in the Partnership Deed. It is owned, managed and controlled by an Association of People for profit. Partnership firms are relatively easy to start are is prevalent amongst small and medium sized businesses in the unorganized sectors.
According to Indian Partnership Act,1932, consent of all the partners in a partnership firm is required in fundamental matters (like admission of new partners, dissolution of the firm, conversion of the firm etc.) and a majority in other matters and there should be sharing of all the profits or losses made in the business.
There are numerous benefits:
- Registration is not compulsory in the case of Partnership firm. Even the registration of a firm is optional; hence no legal formalities are required. Thus they are simple and economical to form and operate.
- A partnership firm is a flexible organization. At any time, the partners can decide to change the size or nature of the business or area of its operation. There is no need to follow any legal procedure. Only the consent of all the partners is required.
- Due the more number of members the partnership firm has larger resources for the business operations as compared to sole proprietorship.
- Each partner has equal right to participate in the management of the business. 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.
- Risk does not fall on one individual’s shoulder in this type; it is shared by all the partners. Every partner bears the risks individually as it is easier compared to sole proprietorship.