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Partner Registration
Limitation of Liability
No Audit Required
Reduced Registration Cost
Separate Legal Entity
Less Procedural Compliances
Our Facts and Figures
Partner Registration
What is Partnership Registration?
Partnership Act of 1932 in India defines and regulates Partnership Firm. Section 4 of this Act states that a partnership is “an agreement between people who have agreed to split profits from the business carried out by them all or one of them acting on behalf of all.”
It is not mandatory to register a partnership, but it is often done because registration has many benefits for the firm. The partners can choose to register the partnership. There are no penalties if they do not. However, it is always recommended to get it done because it gives the firm a legal existence. The state website is where you can register your partnership.
Partnership Firms: Features and Benefits
- Governed by –Partnership Act of 1932
- Any business, profession or Industry
- Profit and Loss Sharing – Based upon a predetermined ratio
- Liability –Unlimited. It allows you to use your personal assets as a way to offset losses.
- Duration-Not Fixed, depends on partners’ wishes or what is specified in the partnership agreement. However, death/retirement/insolvency of any partner among the two auto-dissolves the partnership.
Types TDS Return Forms:
For PARTNERSHIP/Pvt. Ltd. COMPANY
FOR Proprietorship Firm Registration
Benefits of Partnership Registration
- Quick response & decision-making- Every partner can act independently for other partners. This allows the business to react quickly to problems, by reducing the amount of bureaucracy in the decision-making process.
- Profits are distributed to partners according to a predetermined ratio-Profits will be passed on directly to each partner in accordance with the Ratio set forth by the partnership agreement. The partnership profits are then taxed to each individual according to their own personal ratio.
Lower Commencement Cost and Less Formalities-Partnerships are low cost, have few formalities and limited external regulation. Low-cost partnership firms are simple to set up.
What is the annual compliance for producer company?
Points that will make your decision easier
Name
Details
Form MBP1
Each director must disclose their interest in any firm, company or other AOI at the first meeting of its board by submitting Form MBP 1.
Form 8
Each Director of the company must file the disclosure of disqualification each financial year.
Form 7
The Producer Company is required to file an Annual Return on Form MGT-7 containing the most recent information regarding its directors and shareholders.
Form AOC 4
Financial Statements on Form AOC-4, to be filed along with the balance sheet, profit and loss account, directors' report, cash flow statement, auditor's report, and the consolidated financial statement.
Form 1
Within 30 days of the date of incorporation of the company, the Board of Directors shall appoint the auditor. The appointment must be made in ADT-1.
DIR-3 KYC
If you have already filed the form, then it is necessary to verify your OTP via email or mobile number. Otherwise, all new directors are required to submit this form.
Form DPT 3
The Return of deposit should be filed with the Registrar of Companies using FORM DPT-3.
Process of Partnership Firm Registration
There are several steps involved in the registration of a partnership firm. The steps include:
Step 1
All Private Limited Companies in India are required to register for GST within 30 days after incorporation. When the turnover exceeds 40 lakhs INR or INR 20 lakhs for Special Category States, or if the business provides goods or services intra-state, or if it is online.
GST Refund
As soon as a Private Limited Company is registered under GST it becomes necessary for them to file GST Returns. All registered taxpayers, including companies, are required to file GST returns. GST returns are filed either monthly, quarterly or annually depending on the type of GST return form.
Accounting
Each Pvt Ltd Co. must maintain accurate books of account that reflect the true and fair state of the business. Accounting is required for statutory audits, annual filings and IT returns. The auditor of the company will audit these books.
Statutory audit
Each Private Limited Company registered in accordance with the Companies Act must have their book of accounts audited every financial year, regardless of their sales turnover, nature of business or capital. The Board of Directors of Private Limited Companies are required to appoint a Certified Public Accountant in the first 30 days of incorporation, and then conduct an annual audit of their financial statements.
MAT audit
Pvt Ltd Companies must have their accounts audited in order to be eligible for MAT, i.e. Minimum Alternate Tax. The introduction of MAT aimed to bring "zero tax" companies into the tax net, which despite having made substantial profits and paid out handsome dividends do not pay tax because of various tax incentives and concessions provided by the Income Tax Law.
Income tax audit
Every Private Limited Company must have the tax audits done under section 44AB. Section 44AB is a tax audit that aims to verify the compliance with various provisions of Income-tax Law as well as the fulfillment of all other Income-Tax Law requirements. The limit for tax audits under section 44AB amounts to INR 1 crore. 5 crores if at least 95 per cent of the transactions are digital.
ROC Annual filing
Every year, a Private Limited Company must file three forms. The filing is done in relation to the submission of financial statements, i.e. Balance sheet, P&L Account in Form AOC 4, and Annual Return in Form MGT-7. Form ADT 1 is a report from the company about the appointment of an auditor to ROC. Annual ROC filing
IEC Registration
Import Export Code is required for all Private Limited Companies that are involved in Import or export of goods. IE code is valid for life. This code is required for importers and exporters to benefit from exports.
Registration
The name or brand is not fully protected by registering a Private Limited Company. Trademark Registration is the only way to ensure ultimate protection for your business name. You can register your Pvt. Ltd. Co. or brand name, logo or other trademarks.
Documents Required For Partnership Firm Registration
Process of Partnership Firm Registration
There are several steps involved in the registration of a partnership firm. The steps include
Benefits of a private limited company
No Minimum Capital
A Private Limited Company does not require a minimum capital. The minimum capital to register a Private Limited Company is Rs. The total authorized share capital is 10,000.
Separate Legal Entity
A Pvt Ltd Co. has a distinct legal identity before the courts. This means that the assets and liability of the company are different from the assets and liability of the directors. Both are treated as separate.
Limited Liability
The liability of a person is limited, so if the company experiences financial difficulties for whatever reason, personal assets will not be used by the members to pay off the Company's debts.
Fund Raising
In India, a Private Limited Company is the only business form that can be funded by Venture Capitalists and Angel Investors.
FDI is allowed
Private Limited Companies allow 100% Foreign Direct Investment. This means that any foreign person or entity can invest directly in a Private Limited Company.
Credibility is important
A public database contains the details of a company. This improves the credibility as the company's details can be easily verified.
5 easy steps
How do I file annual filing forms for a producer company?
Comply with your annual compliance in just 5 easy steps
FAQs of Partnership Registration
Do I need to register my partnership?
No. It is not mandatory to register a partnership but it can have the following effects if it’s not done:
- In order to assert rights, one cannot sue another partner or the firm against one’s own partner.
- The Partnership Firm cannot sue a third party to enforce its rights in a court of law.
What is the minimum capital requirement for registration?
No minimum capital is required to form a partnership firm. Capital contributions from the partners can start at any amount. Partners can contribute any agreed amount or/and any form, whether tangible (cash or premise), or intangible, (goodwill or intellectual property). Capital can be introduced by the Partners in any ratio.
How many people must be registered to form a partnership? Are there any requirements?
The process described above can be followed to form a partnership with just two partners. The Partners of the firm are also required to be Indian citizens and residents. Only non-resident Indians and persons of Indian origin can invest into a Partnership with the prior approval of government. Individuals must be competent and not minors. Minors can only be admitted for profit.
What are the benefits of registering a partnership?
- Quick response & decision-making- Every partner can act independently for other partners. This allows the business to react quickly to problems, by reducing the amount of bureaucracy in the decision-making process.
- Profits based on a predetermined ratio- Profits will be distributed to partners in accordance with their partnership agreement. The profits of the partnership are taxed to each individual according to their share.
- Low Start-up Cost and Fewer Formalities Partnerships are low cost, have few formalities, & face limited external regulation. Low-cost partnership firms are simple to set up.
- Does it matter if I have a partnership deed to register a partnership?
No, a partnership deed is not required for registration. The contract act does require that the agreement be in writing. It is wise to create a partnership agreement to be able to show it to the client, the income tax authority, and the bank. A written partnership deed serves as a reference and helps to reduce conflict and confusion over time.
Who can become a partner in a firm?
The Partners should be majors (i.e. The partners must be majors
How can a child become a joint partner upon reaching majority?
Minors can enjoy the benefits of partnership and have the option of becoming partners within six months after reaching majority. Adoptions are allowed after 18 years and in general 21 years. He must give public notice of his acceptance or rejection. It is assumed that, in the absence of a notice, he is a partner.
What are the limits of a partner?
As a partnership, you cannot do any of the following things without the consent from the other partners.
- Send a dispute about business to an arbitration panel;
- Open a bank in your name for the company.
- Compromise or give up any claim, or a portion of a firm’s claim;
- Retracting a lawsuit or proceeding brought on behalf of the firm
- Invoking a partnership on behalf of a firm with an external partner
- Transferring or purchasing a firm’s immovable assets;
- Acknowledging any liability in the case or proceeding against the company.
Can the right to be a partner be transferred to another outsider?
A partner can indeed transfer their interest in the company to an outsider, but only with the consent from all the other partners.
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