A company is established after the successful completion of different steps involved in the company establishment/incorporation process. The Government mentions guidelines, laws to follow and rules and regulations that individuals follow before incorporating their businesses. In this article, we will talk about one of the most common types of companies, Partnership firms and Partnership Firm Registration. Understanding the process of formation of a partnership firm is important.
What are the different types of companies?
The first decision an individual or a group of individuals take is to select the types of company. We will talk about different types of companies in this section –
- Sole Proprietorship
- Partnership Firm
- Corporation or Company
- One person company
- Section 8 Company
- Company Limited by Guarantee
- Public Limited Company
What are the types of Partnership Firms?
A partnership firm or company is further divided into many categories, the selection of which is undertaken on the basis of many factors. Only after deciding on the type, the individuals can move on the Partnership Firm Registration.
- General Partnership
- Limited Partnership
- Limited Liability Partnership
- Public Private Partnership
Who are the different types of Partners in a Partnership firm?
It is important to understand the different types of partners that a part of partnership firms.
- Minor partner
- Working partner
- Sleeping partner
- Limited Partner
- Partner by holding out
What are the features of Partnership Firm?
Partnership Firm Registration is a crucial process, thus understanding the characteristics of a company is important before applying for its registration.
Some features of a Partnership Firm are as follows:
- Mutual contribution
- Division of Profits or Losses
- Co-ownership of contributed assets
- Mutual agency
- Limited life
- Unlimited liability
- Partners’ Equity Accounts
- Fewer Compliances to follow
- Minimum legal compliances
What are the benefits of Partnership Firm?
A partnership firm has several advantages in comparison to other types of companies, which will be talked about in this section.
- Simple form of business structure
The business structure of the partnership company is simpler as compared to the structure off other companies as there are only 2 individuals required as partners.
- Easy process of decision making
As there are rules and regulations involved in a partnership firm, the decision making process is easier.
- Ease of raising funds
It is easier to get loans and advances for a partnership firm as compared to other firms such as large corporations.
- Easy management
The managing of the business activities is easier in a partnership firm as all the duties and responsibilities are assigned to the partners.
What is the process of Partnership Firm Registration?
The registration process of partnership firms involves steps that are necessary for the individuals to follow in order to receive partnership firm registration and start business activities.
Selection of an appropriate name
The first step in the Partnership Firm Registration process is the selection of the name of the company. Certain guidelines are mentioned with regards to name selection which must be followed by the applicants. The name of the company must not include emperor, empress, crown, empire etc. set up a company