Partnership At ₹ 499
A Partnership is one of the Forms of business structure in which two or more individuals manage and operate their business in accordance with the terms and goals set out in the Partnership Deed. Partnership registration is relatively easy and is prevalent among small and medium sized businesses in the unorganized sectors.
Partnership Firm is easy to set up as there is no need for registration. Signing on the partnership agreement alone is more than enough. All kinds of debts and legal issues are required to be resolved by the partners of the firm. A partnership firm is of two types: Registered and Unregistered. Only a maximum of 20 members is allowed to be partners.
1. Minimum 2 Persons are Required to Set up a Partnership
2. Low cost in Setting Up a Partnership Firm
3. Less compliance Requirements as compared to any other Form of Business
4. Shared Responsibilities and Duties Between Partners
1. Minimum 2 Person: Minimum 2 Person are Required to Form a Partnership Business. However, maximum 20 partners are allowed in a firm (10 in banking business).
2. No Minimum Capital Requirement: There is no Minimum Capital Requirement in Partnership Business.
3. NO Foreign Direct Investment: No FDI is allowed in case of Partnership Business. only Indian citizen can become the partner and start the partnership firm.
4. Unique Name: Name of the firm should be unique, and it must not same or similar to the name of any existing trademark which is registered or applied.
Authority: LLPs are registered in India under the Ministry of Corporate Affairs, Central Government. Partnership firms are registered with the Registrar of Firms, controlled by the respective State Government in which the firm is registered.
Limited Liability Protection: The main advantage of a Limited Liability Partnership over a traditional partnership firm is that in an LLP, one partner is not responsible or liable for another partner’s misconduct or negligence. An LLP also provides limited liability protection for the owners from the debts of the LLP. However, unlike private limited company shareholder, the partners of an LLP have the right to manage the business directly.
Number of Partners: LLPs and Partnership Firms must have a minimum of two partners to be registered. Post incorporation, an LLP can have unlimited partners. In case of a Partnership Firm, if the number of partners at any time reduces below the mandatory minimum of 2 due to death, incapacitation or resignation of a Partner, the partnership firm would stand dissolved. On the other hand, in case of an LLP, if the number of Partners reduces below 2, the sole Partner can still find a new Partner to fill the position without dissolution of the LLP.