A simple, low-cost way for partners to run a business together.
A Partnership Firm is one of the simplest and most affordable ways for two or more people to run a business together. Governed by the Indian Partnership Act, 1932, it is created through a partnership deed that sets out profit-sharing ratios, roles, capital contributions and the rights and duties of each partner. While registration with the Registrar of Firms is optional, a registered firm enjoys important legal advantages — a registered partnership can sue third parties and other partners to enforce its rights, which an unregistered firm cannot. It is well-suited to small trading businesses, retail outlets and family ventures that want quick set-up with minimal compliance.
Two or more partners running a small trading, retail or service business who want minimal compliance.
Timelines and government fees are indicative and subject to processing by the relevant authority. Approval and its timing are decided by the authority and cannot be guaranteed.
No, but a registered firm gains the legal right to sue partners and third parties, so registration is strongly advised.
A firm is taxed at a flat 30% plus surcharge and cess; partners' remuneration and interest are deductible within limits.
Yes, a registered partnership can be converted into an LLP for limited-liability protection.
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