Partnership is another form of constitution of business where more than one person is carrying out business activity under a common name.
Partnership firm can be registered or unregistered. Unregistered Partnership firms denied some rights as per Partnership Act.
Also, Partnership firm has to pay tax flat@30% which is a little disadvantage as tax rate is higher in this in comparison to sole proprietorship wherein slab benefit is available
Benefits of Partnership firm
- It is easy to start since it does not involve any regulatory framework as far as unregistered partnership is concerned.
- Partnership can easily raise funds in comparison to sole proprietor.
Audit Applicability in case of Partnership firms
- Partnership firms that satisfy any of the conditions below would be required to get accounts audited.
- Carrying on business and total sales exceed Rs.1 crore in the previous year.
- Carrying on a profession and gross receipts in profession exceed Rs.50 lakhs in any previous year.
- Besides, there are other conditions applicable that could make an audit mandatory for a partnership firm
Documents required for registration
- Pan Card
- Id Proof and address proof of proprietor
- Proof of registered office like rent agreement or Utility Bill