Partnership deed Drafing
A partnership deed is an agreement between the partners of a firm containing terms and conditions of partnership to avoid unnecessary misunderstanding, harassment and unpleasantness among the partners in the event of any dispute. For mutual benefit, the registration of Deed of Partnership is made under the Indian Registration Act, 1908 so as to avoid apprehension of the Deed of partnership being destroyed or mutilated in the possession of the partners.
- Objective of the firm
- Duration of partnership
- Profit/loss sharing ratio
- Salary and commission (if any payable to partners)
- Capital contribution by to be made by each partner and Interest thereon
- Partner’s loan
- Duties and obligations
- Admission death and retirement of partner
- Policy regarding the drawings from the firm allowed to each partner and interest if any to be paid by partner, to firm on such drawings
The smooth and successful running of a partnership firm requires clear understanding among its partners regarding the various policies governing their partnership. The partnership deed serves this purpose. It specifies the various terms such as profit/loss sharing, salary, interest on capital, drawings, admission of a new partner, etc. in order to bring clarity to the partners. It is not mandatory to have partnership deed, but it is better to enter into partnership deed to avoid any possible disputes and litigation among the partners. It must be stamped and signed by all the partners
Execution
partnership agreement must be printed on a Non-Judicial Stamp Paper with a value of Rs.100/- or more. The partnership agreement is usually signed in the presence of all the partners and each of the partners would retain a signed original for his/her records.
Partnership Firm Registration
A Partnership Firm is a popular form of business constitution for businesses that are owned, managed and controlled by an Association of People for profit.two or more people come together to form a business and divide the profits thereof in an agreed ratio. Partnership firms are relatively easy to start. With the introduction of Limited Liability Partnerships in India, Partnership Firms are fast losing their prevalence due to the added advantages offered by a Limited Liability Partnership
There are two types of Partnership firms, registered and un-registered Partnership firm. It is not compulsory to register a Partnership firm; however, it is advisable to register a Partnership firm due to the added advantages. Partnership firms are created by drafting a Partnership deed amongst the Partners and GETMYCA can help start a registered or un-registered Partnership firm in India.
Easy to Start
A Partnership is easy to form as no cumbersome legal formalities are involved. Its registration is also not essential
Business Name
Since the name of a Partnership firm is not registered, a Partnership firm can choose to have any name - as long as it does not infringe on a registered trademark. However, since the name is not registered, any other person can also use the same business name unless trademark registration is obtained
Partnership Deed
In a Partnership firm, the partnership deed will determine the ownership of the firm, profit sharing ratio, rights and responsibilities of each of the Partner.
Annual Filing NOT Required
A Partnership firm is not required to file its annual accounts with the Registrar each year, unlike a Limited Liability Partnership or Company. Limited Liability Partnership's and companies are required to file their annual accounts with the Registrar of Companies each year.
Bank Account
Bank account can be opened in the name of a Partnership firm. To open bank account, the partnership deed copy and KYC documents of the Partner must be submitted along with any other document as required by the Bank.
Obtaining Pan & Tan
TAN or Tax Deduction and Collection Number (TAN) is a mandatory 10 digit alpha number required to be obtained by all persons who are responsible for Tax Deduction at Source (TDS) or Tax Collection at Source (TCS) on behalf of the Government. Tax deducted at source (TDS) ensures that the Government's collection of tax is proponed and the responsibility for paying tax is diversified. The person deducting the tax at source is required to deposit the tax deducted to the credit of the Central Government - quoting the TAN number. Individuals who are salaried are not required to obtain TAN or deduct tax at source. However, a proprietorship business and other entities (i.e., Private Limited Company, LLP, etc.,) must deduct tax at source while making certain payment like salary, payments to contractor or sub-contractors..
- For getting Subsidy on Gas Cylinders/PNG
- Payment of mutual funds exceeding ₹ 50,000.
- Sale/Purchase of Immovable Property valued more than ₹ 10 lakh
- Sale/Purchase of all four-wheeler vehicles.
- Opening an account with a banking company.
- Payment of Life Insurance Premium exceeding ₹ 50,000 a year
Tan Registration
TAN or Tax Deduction and Collection Number (TAN) is mandatory 10 digit alpha number required to be obtained by all persons who are responsible for Tax Deduction at Source (TDS) or Tax Collection at Source..
- TAN, application must be made for allotment of TAN
- Based on the application, the TAN will be allotted to the entity and the entity must quote the TAN in all TDS/TCS returns
- The applicant may either edit or confirm the same..
- If there are any errors, rectify them and re-submit