A Partnership Firm is a popular form of business which is owned, managed and controlled by an Association of Persons for profit. Partnership firms are relatively easy to start and is prevalent amongst small and medium sized businesses in the unorganized sectors. With the introduction of Limited Liability Partnerships in India, Partnership Firms are fast losing their prevalence due to the added advantages offered by a Limited Liability Partnership.
There are two types of Partnership firms, registered and un-registered Partnership firm. It is not compulsory to register a Partnership firm; however, it is advisable to register a Partnership firm due to the added advantages. Partnership firms are created by drafting a Partnership deed amongst the Partners and we at LegalVista can help you start a registered or un-registered Partnership firm in India.
Advantages of Partnership:
* Easy to Start – A Partnership is easy to form as no cumbersome legal formalities are involved. Its registration is also not essential. However, if the firm is not registered, it will be deprived of certain legal benefits. The Registrar of Firms is responsible for registering partnership firms.
* Business Name – Since the name of a Partnership firm is not registered, a Partnership firm can choose to have any name – as long as it does not infringe on a registered trademark. However, since the name is not registered, any other person can also use the same business name unless trademark registration is obtained.
* Annual Filing NOT Required – A Partnership firm is not required to file its annual accounts with the Registrar each year unlike a Limited Liability Partnership or a Company. Limited Liability Partnerships and Companies are required to file their annual accounts with Registrar of Companies each year.