What is partnership firm?
Firms governed by Indian Partnership Act, 1932, where two or more persons forms an organization to earn profit from a business are known as partnership firms. Each of the organization’s member is called as partner & together they form an organization.
Types of partners in partnership firm
- Active or managing partner
- Sleeping or dormant partner
- Nominal or ostensible partner
- Sleeping vs. Nominal Partners
- Partner by estoppel or holding out
- Partner in profits only
- Minor as a partner
- Limited Partner
Dissolution of partnership and firm
Ending a partnership alludes to the discontinuance of the connection among accomplice and other partners of the firm. Disintegration of firm infers that whole firm stops to exist, including the connection among all the accomplices. Business of the firm proceeds as in the past. Business of the firm reaches to a conclusion not to the business of it.
Legal compliance under Partnership firm
- Partnership firms are required to keep up consistence like LLPs and Companies enlisted in India.
- Partnership firm consistence principally incorporates documenting of personal assessment form,
- To be complied with TDS regulations.
- GST regulations,
- VAT / CST regulations
- Service Tax regulations
- ESI regulations
- It is also stated that the compliances for them can vary on the type of entity, industry, state of incorporation, number of employees and sales turnover.
Taxation compliance under Partnership firm
- Registration of firm in Form I with a time limit of 1 year.
- Change in Firm Name or Principal Place or Nature of Business in Form II with a time limit of 90 days.
- Closing and Opening of Branches in Form III with a time limit of 90 days.
- Change in Name/Address of Partner in Form IV with a time limit of 90 days.
- Change in Constitution or Dissolution in Form V with a time limit of 90 days.
When a minor becomes major and elects to become or not to become a partner in Form VI with a time limit of 90 days.
