A Partnership Firm is consisting of two or more people having the mutual understanding to run a business and earned profit. Partnership firms are governed by the Indian Partnership Act, 1932 in India. Persons who sign the deed are known as partners and collectively can be seen as a partnership firm.

Benefits of a partnership firm:

• Can be formed just by a notarised deed i.e. easy formation.
• Can be operated easily, with no restrictions in the law.
• Can have a greater/larger operational size than a proprietorship firm.
• Can be managed better.
• Business risk is shared between partners.
• Easy sharing of profit too.

Disadvantages of a partnership firm:

• Not properly protected by law.
• Unlimited liability of partners
• Disagreement between partners
• Limitation of capital
• The high tax rate in Income tax law

Features of a partnership firm:

• Minimum 2 or more partners
• Registration is not compulsory
• Contract in the form of partnership deed
• Partners can not be minor.
• Unlimited liability of partners
• Mutual consent for any change in partnership
• Partners have to work in the best interest of the firm

Registration & Documents:

A partnership firm can be started anytime without being registered with the registrar and without doing any legal formalities. If you want to get register as a partnership firm then an application can be filed under the Indian Partnership Act, 1932. The application is to be filed with the jurisdictional Registrar of Firm. The Registrar of Firm after being satisfied will issue a certificate of registration to the firm.

Documents in brief:

• Application form as prescribed in law (Generally Form 1)
• ID, Address proof & Photos of all Partners
• Partnership deed duly signed
• Proof of business address

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