When two or more persons come together with a common objective to earn profit. All the persons who come together agree to share profit as well as losses in equal or predetermined ratio.
Partnership is a form of organisation which is not compulsory required by the law to get registered. It is popular because of the flexibility provided by it. It is preferred where two or more persons come together and their synergy meets to carry on a business. Every person contributes something to the group. Partnership firms are relatively easy to start. Partnership firm allows joint ownership of a business. Every member or partner is owner to the firm.
These are prevalent amongst small and medium sized businesses in the unorganized sectors. It is generally formed between the people with same goal, intellects, aims and motives and are also willing to operate at a small level. This structure provides a suitable gauge for small level of organisation.
Though it is not required by the law to get the partnership agreement registered, it is advised to go for registration to rule out any future disputes. It is partnership deed which determines the role of every partner and also explains how they are required to contribute to the firm. You can get your partnership deed registered in the future also if not done earlier. Because a registered deed comes with add on benefits. It enables the firm to enter into a legal suit in case of any fraud against it and is also legally enforceable.
It allows different minds to come together which enables a large pool of different ideas providing an edge to your business.
A single person is not always sufficient to fund the business. It allows funds from different people to be invested in business.
In case of a down fall you'll not be the only one to be bearing the loss, the loss will be shared and thus less loss of personal capital.
There are no mandatory statutory requirements to be fulfilled which saves from hectic procedures and added cost.
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