Partnership

What Is Partnership

A partnership is a type of business structure where two or more individuals (or entities) agree to share ownership, responsibilities, profits, and losses of a business. Partnerships are commonly formed by professionals, entrepreneurs, or businesses to pool resources, skills, and capital.

Types of Partnerships

1  General Partnership (GP) – All partners share equal responsibility for managing the business and its liabilities.  

2  Limited Partnership (LP) – One or more partners have limited liability, while general partners manage the business.  

3  Limited Liability Partnership (LLP) – All partners have limited liability, protecting their personal assets from business debts.

Benefits Of Partnerships

  • 1 Easy to Form and Operate
  • Requires minimal legal formalities compared to a company.
  • A simple Partnership Deed is enough to define terms.
  • 2 Shared Responsibility & Expertise
  • Workload and decision-making are divided among partners.
  • Each partner brings unique skills, resources, and experience.
  • 3 More Capital Availability
  • Multiple partners contribute capital, improving financial strength.
  • Easier to raise funds compared to sole proprietorships.
  • 4 Tax Benefits
  • Partnerships are not subject to corporate tax; profits are taxed as personal income.
  • Business expenses can be deducted before profit distribution.
  • 5 Flexibility in Management
  • No strict regulations like corporations; partners can define their own rules.
  • Decision-making is quick due to fewer legal constraints.
  • 6 Continuity & Growth Potential
  • A well-managed partnership can expand more easily than a sole proprietorship.
  • In LLPs, the business continues even if partners change.

Documents Required for Partnership Firm Registration in India

1. Documents of Partners

PAN Card – Mandatory for all partners.
Aadhaar Card/Voter ID/Passport/Driving License – Any one for identity proof.
Address Proof – Latest electricity bill, bank statement, or telephone bill.
Passport-size Photos – Recent photographs of all partners.

2. Business-related Documents

Partnership Deed – A legal agreement defining the terms of the partnership, including:

Business name and nature

Profit-sharing ratio

Duties and responsibilities of partners

Capital contribution by each partner
Business Address Proof –Owned Property: Property tax receipt or sale deed.
Rented Property: Rent agreement & No Objection Certificate (NOC) from the owner.

3. Registration & Compliance Documents (If Applicable)

Firm PAN Card – Required for tax filings.
GST Registration – If turnover exceeds the GST threshold limit.
Bank Account Opening Proof – Partnership deed & KYC of partners.
Shop and Establishment Act License – Required in some states for business operations.

Scroll to Top