A partnership firm refers to a business house which is owned by two or more people jointly. There are a large number of partnership firms all over the world. There are many advantages associated with partnership businesses. In order to start a partnership firm, several formalities are required to be completed. Different countries and states have different laws with regards to partnership firms. If you wish to know about the basic procedure of starting a partnership firm then you should read on.
Here are the basic steps for starting a partnership firm :
First, all the partners need to have a partnership deed which is accepted by all of them. A partnership deed is a crucial document which includes a lot of information like capital contribution of all the partners, ratio of profit/loss sharing by different partners, time period of business(if applicable), salary to be given to one or more partners, responsibilities, name and address of all the partners and other conditions.
Second, a partnership firm should register itself with the office of “Registrar of firms”. It is very important to register a partnership firm for getting recognition and license from the government. If a partnership firm is not registered then it will not be treated as a partnership firm by the government. Third, while applying for registration, partners need to submit a copy of the partnership deed along with other documents to the “Registrar of firms”.
A local lawyer can be hired for getting the partnership deed prepared. One should get a partnership deed made on stamp paper according to the laws of the state in which the partnership firm is started. All the partners must read the partnership deed carefully and it should be signed by all of them. In case of any dispute between the partners of a partnership firm, the partnership deed will help a lot to solve the dispute. Therefore, a partnership deed is treated as one of the most important document while starting a partnership firm in any country.