Partnership Registration
Partnership firm represents a business entity that is formed with a purpose of making a profit from the business. Two or more parties come together with a formal agreement (known as Partnership Deed) to own and manage the business. The risk and responsibilities are shared amongst the partners that shred the burden of an individual partner. Also, when two comes together, more capital and expertise are combined that helps to reach the business goals easily.
" A minimum of two Persons is required to start a Partnership firm. A maximum number of 20 Partners are allowed in a Partnership firm. "
The Partner must be an Indian citizen and a Resident of India. Non-Resident Indians and Persons of Indian Origin can only invest in a Proprietorship with prior approval of the Government of India.
There is no limit on the minimum capital for starting a Partnership firm. Therefore, a Partnership firm can be started with any amount of minimum capital.
Partnership firms are registered by the Registrar of Firms, under the Indian Partnership Act, 1932.
Partnership firm will have to file their annual tax return with the Income Tax Department. Other tax filings like GST Return, Professional tax return, TDS Return, etc. may be necessary from time to time, based on the business activity performed. However, annual report or accounts need not be filed with the Ministry or Corporate Affairs, which is required for Limited Liability Partnerships and Companies.
It is not necessary for Partnerships to prepare audited financial statements each year. However, a tax audit may be necessary based on turnover and other criterion.