What is a partnership business?
A partnership business is a legal arrangement by two or more parties to control and run business and share profits and liabilities. There are two type of partnership firm:-
Registered firm :-
A Partnership firm duly registered with the Registrar of Firm. As per the Act, When the Registrar is satisfied that the provisions of section 58 have been duly complied with, he shall record an entry of the statement in a register called the Register of Firms and shall file the statement.
Unregistered firm :-
A partnership firm which is not registered with the Registrar of the Firm. The act doesn’t require the partnership firm to be registered in other words.
Who should start a partnership business :-
Anyone, who is comfortable in working with other people and has no objection in sharing the management and operations of the business, Also, someone who is absolutely ok with sharing the profits with other people, can get into a partnership business and can enjoy the perks.
How to start partnership business?
1) Make decisions about partners.
The first step is the main and very crucial step, one should decide the following things among the partners before starting a partnership business:-
- A) Partners' contribution to the firm capital
- B) Partners' share of profit
- C) Partners' type
2) Finalisation of Partnership Business Name
3) Register your partnership with state as per the applicable provisions
4) Create a Partnership Agreement having all the terms and condition mentioned in it and signed by all the partners.
You are now ready to commence your business legally.