A Partnership is defined by the Indian Partnership Act, 1932, as 'the relation between persons who have agreed to share profits of the business carried on by all or any of them acting for all'. This definition gives three minimum requirements to constitute a partnership.
- There must be an agreement entered into orally or in writing by the persons who desire to form a partnership.
- The object of the agreement must be to share the profits of business intended to be carried on by the partnership, and
- The business must be carried on by all the partners or by any of them acting for all of them.
Partnership Firm Registration India
Partnership is the association of two or more persons. Partnership firm registration is not essential. However, unless a partnership firm is registered with the Registrar of Firms, the rights of the partners against strangers cannot be enforced in a court of law. Partnership firm are taxed separately and there is need to file separate income tax returns for your business. The partners should go for registration because consequences of non registration may be severe and detrimental to their interest. The registration of the firm may be effected at any time by sending or by delivering to the registrar of the area in which any place of business of the firm is proposed to be situated, a statement in the prescribed form and accompanied by prescribed fee stating the firm name, the place or principal place of the business of the firm, the names of any other places where the firm carries on business, the date at which each partner joined the firm, the names in full and permanent addresses of the partners and the duration of the firm.