John Miller (Business Strategist) 06 March 2020
firstname.lastname@example.org 06 March 2020
email@example.com 06 March 2020
Raj Kumar Makkad (Adv P & H High Court Chandigarh) 06 March 2020
The most used partnership types are listed here with their distinct features to allow you choosing the suitable type.
In this type of partnership, each partner has right to take decision about the working and management of the firm. Downside being that the partner’s liability is unlimited and in case of a financial error / loss incurred by the act of a single partner the personal assets of all the partners can be taken away to pay back the debts and creditors’ claims.
General partnership is further bifurcated into two categories:
Usually when a partnership is created, it is upon the partners to decide till when they want the partnership to exist. Hence, whenever a partnership is created without a specific time limit of its closure, its termed as partnership at will. The dissolution of partnership is the matter of mutual consideration when need arises and is not pre-decided. It is upon the partners to decide mutually till what period of time they want the partnership to be functioning.
This is the type of partnership that is created with an aim to carry out a specific undertaking. When partnership is created for a project of a temporary contract-based work or a specific business only, they are termed as particular partnerships. Once the objective of the business is achieved or the act for which the partnership was created in fulfilled, the partnership will be dissolved. However, the partners have the discretion to come to an agreement in case they wish to continue the said partnership. But in the absence of this, the partnership ends when the task is complete. For example, a partnership for the construction of a building or partnership for producing a movie.
A limited partnership unlike general partnership is a corporate form of business organization. Here, the liabilities are limited to each partner according to their agreed contribution to the business. The personal property of a partner cannot be attached to pay back the firms debts. This hybrid organization is governed under the Limited Liability Partnership Act, 2008 and not under Partnership Act.
The Partnership Act does not mandate the registration of partnership firm. Both, registered and unregistered firms are valid and recognised under law.
An unregistered firm is established by execution of an agreement by the partners. The unregistered partnership firm allows the Partners to carry on the business in manner stated and provided in the agreement.
The Partnership Firm is to be registered with the Registrar of Firm (RoF) having jurisdiction over the place of business of the Firm. The registration application involved payment of registration fee to RoF, varied from state to state according to the State Law. The registered partnership firm is preferred in many cases due to the benefits offered by a registered partnership firm.
abhi jani 11 March 2020
A partnership is called as relation with two or more persons agree to carry on the business and share the profit and loss equally or in agreed ratio. It can be called as business with multiple owners. The partners desire to achieve the common business goals by entering into Deed of Partnership, and hereby agree to form a Partnership firm under the Indian Law. Partnership firm are of two types: general and limited partnership.
General Partnership is that type of partnership in which each and every partner share profits of the firm equally and they have equal rights and duties in the business. General partnership is governed by the Indian Partnership Act – 1932. It may be registered or unregistered with ROC. The liability of all the partners is unlimited.
Limited Liability Partnership (LLP)
LLP is an incorporated partnership registered under the LLP Act, 2008. The registration of LLP is mandatory. All the partners are liable for their own conduct. The liability of all the partners is limited.