The partnership is an established structure in which two (or more) people join hands to do business. Low costs, ease of setting up and minimal compliance requirements make it a sensible option for such businesses. This form of structure is ideal if there is no/less requirement of external funds and low risk of bad-debts (eg consultancy firms). In such a business, members are partners who share the profits as well as liabilities of the firm. Register a Partnership firm for your business.
Documents of Partners:
Excludes Foreign National or Foreign Body corporates as partners or activities that need approval from RBI, SEBI or IRDA. For LLP with FDI, refer to Foreign Subsidiary in India.
Partnership firm, like proprietorship, has very minimal compliance requirements. Also, the privacy partnership firm gives to the organisation is unparalleled.
Even with LLP, annual filing of financial statements needs to be done with the Registrar of Companies. Such documents are also made public. On the other hand, registered/ unregistered Partnership Firms are not required to file any annual returns, and the financial statements are not made public.
Partnership does not give a limited liability protection to its Partners and does not have perpetual existence. The structure does not allow for investment from Angel Investors, Venture Capitalists or Private Equity Firms. Banks also prefer LLPs over Partnerships as they are separate entities and the compliance makes them more transparent and structured.
Your registered office need not be a commercial space; it can be your residence too. A recent copy of the utility bill and an NoC letter from the utility bill owner to use the address for company incorporation should be submitted.
The incorporation process is completely online, so you don’t have to visit any place and can get the company registered from anywhere.
The Partner must be an Indian resident. NRIs and foreign nationals can only invest in a partnership, that also, with prior approval of the Government of India. If you’re looking for such a route, refer to LLP.
No. Partnership firms are exempted from annual filings or audits.
Only a registered Partnership firm can file a suit in any court against the firm or other partners. Also, only a Registered Partnership firm can claim a set off or other proceedings in a dispute with a third party. Hence, it is advisable for Partnership firms to get registered.