A partnership firm is a business structure where two or more individuals agree to run a business together, pooling resources, skills, and capital, with the goal of sharing profits and losses as defined in a partnership agreement (deed). Key features include shared management, unlimited liability (partners are personally responsible for debts), and mutual agency (each partner acts on behalf of the firm). It's a simple, popular structure governed by laws like India's Partnership Act, 1932, where the firm itself isn't a separate legal entity from its partners.
What is Partnership
Key Characteristics
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Agreement: Formed by a mutual agreement (Partnership Deed) outlining terms, profit sharing, etc..
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Two or More People: Requires a minimum of two partners.
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Shared Profits/Losses: Profits and losses are divided among partners in a pre-agreed ratio.
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Mutual Agency: Each partner acts as both an agent for the firm and a principal for other partners.
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Unlimited Liability: Partners are personally liable for all business debts, meaning personal assets can be used to pay off firm liabilities.
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Not a Separate Legal Entity: The firm and partners are legally the same, unlike a company.
How it Works
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Formation: Partners agree on terms and create a Partnership Deed.
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Operation: Business is run by all partners or by one acting for all.
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Liability: If the firm can't pay debts, creditors can pursue partners' personal assets.
Advantages
Easy to form with minimal compliance.Greater capital pooling and shared skills.
Disadvantages
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Unlimited liability (a major drawback).
2.Potential for conflicts between partners.
Required documents
To form a partnership firm, you need key documents like the Partnership Deed, individual partners' ID/Address Proofs (Aadhaar, PAN, DL), proof of the Firm's Address, and the firm's own PAN Card, plus applications (Form 1) and an affidavit, often for bank accounts and registration, requiring details like business nature, profit-sharing, and partner KYC
Core Partnership Documents
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Partnership Deed: A crucial, legally certified document outlining the firm's name, partners, business scope, profit-sharing ratio, capital contributions, and rules.
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Form 1: Application form for registering the partnership with the Registrar of Firms.
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Affidavit: A sworn statement confirming the accuracy of information provided for registration
Partner & Firm Identification/Address Proofs
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Partners' KYC: Aadhaar Card, PAN Card, Voter ID, or Passport copies for allpartners.
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Firm's PAN Card: Permanent Account Number for the partnership entity itself.
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Firm Address Proof: Lease agreement, utility bill (electricity/water), or NOC from the landlord for the business premises.
Other Essential Documents & Registrations
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Trade License: Depending on your business type and location.
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GST Registration: Required for tax compliance if your turnover meets thresholds.
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Power of Attorney (Optional): If authorizing a partner or employee to act on the firm's behalf.
Assam State Portal
For Opening Bank Accounts (Additional)
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Cancelled Cheque: Or latest bank statement/passbook of the firm.
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Financials: Net-worth certificate or audited balance sheets (for new firms, a declaration on letterhead).
Related Services
Legal Services
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Trade License
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GST Registration
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Pancard Services
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