Partnership is a legal form of business organisation, where two or more individuals share management, controls, risk, loss and profit concerned to that organisation. This form of business is governed by PARTNERSHIP ACT 1932, and there is a documents containing all rules and regulations for running and maintaining the business which is legally known as partnership deed. Any rule or point not covered in partnership deed will be governed by PARTNERSHIP ACT 1932. Partnership Deed should have clauses which are inline with income tax act 1961 to take the maximum tax benefits. Partnership is suitable for small and medium enterprises. To form a partnership there should be mutual understanding amongst all the partners and partners are altogether liable and responsible for day to day working of partnership. Partnership will have separate PAN card in its name.
Key benefits of Partnership:-
- Simple registration process
- Less expensive compared to company or llp
- Less compliance as compared to private Limited company or LLP.
- Segregation of risk
- No restriction on selection of name