Partnership is a deal of two or more persons take on a business in the position of co- owner. Person in this firm called partner. All the partners share the surplus and deficit in fraction of their corresponding ownership, or as decides between them.
According 1932, Indian Partnership Acts –“partnership is the relation which survive between two or more person who have agree to share the profit and losses of a business bring by all.”
MERITS OF PARTNERSHIP FIRM
Some benefits of partnership firm
- EASY TO START UP- It’s easy to start up. The starting of partnership firm in many case needed partnership deed. So, on same day partnership firm can be started.
- QUICK DECISION MAKING- In partnership firm take quick decision because there is no concept of the flow of resolve. In this firm, in some cases partners can handle any settlement on behalf of partnership deed without concerning to others.
- EASY RISING OF FUNDS- In partnership partners are easily raise funds because there are number of partners contribute for their firm
- SHARING PROFIT AND LOSS-The partners share profit and loss equally in the firm. But they have to liable to decides there ratio of profit and loss in the partnership firm. Thus, the profit and income depends on their work. Hence reduces the load of loss on one partner.
DEMERITS OF PARTNERSHIP FIRM
Some limitations of partnership firm
- UNLIMITED LIABILITY- Under these partners is responsible for all the losses of the partnership firm. The liability made by partners in the firm makes each partner personally responsible.
- NUMBER OF MEMBERS- In partnership firm the maximum number of member limits 20. As compare to some firm there are no limits in numbers of maximum members.
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- TRUST OF PUBLIC- A partnership firm is easy to set up and doesn’t needed registration and it is also managed without many regulations. Because of this, it leads to distrust amongst the general public.
REGISTRATION PROCEDURE OF PARTNERSHIP FIRM
- Step-01 - APPLICATION FOR REGISTRATION- In which the firm is located the application firm is file to the registrar. And this application is signed and verified by all the partners of the firm. It can be sent to the the registrar by post or physical delivery.
- Step-02 - SELECTION OF NAME OF THE FIRM
- Step-03 - CERTIFICATE OF REGISTRATION
Every person who is the age of majority as per the constitution to which he is concerns. And who is sound minded and not eliminated by low of contract.