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5 Simple Steps

To Partnership Firm Compliance Adherence

Documents For Compliances of Partnership Firms

Registration

Form No. 1 for registrationOriginal documents for Partnership Deed Signed by All Partners
Affidavit Declaring the Intention to Become PartnerRental Or Lease Agreement for Campus/Property for the business

Mandatory Compliances of Partnership Firms

IT Return

It is mandatory for all partnership firms to file the IT Return. If the overall turnover annually ranges above INR 100 lakhs, the company needs to complete the tax audit.

GST Filing

Partnership firms with GST registration need to file the same in a quarterly, monthly, as well as annual basis.

TDS Filing

Partnership firms must file the TDS returns on a quarterly basis and are needed to deduct the tax at the source as defined under the TDS rule.

ESI Return

The ESI return needs to be filed by partnership firms with ESI registration.

VAT/Service Tax

Incase the partnership firm opts for a VAT/Service Tax registration, it needs ti file the returns for the same.


About Partnership Firm Compliance


Partnership firms are among the common variations of business entities in India where 2 or even more people join together for creation of a profitable business. The partnership firms needs to file IT returns using the ITR 5 form for each financial term. An audit is generally required for the partnership firm when the cumulative sales lead to an overall turnover of more than 1 crores for the same financial year.

  • Basic Package
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  • Income tax return filing + Accounting + Compliance management for a partnership firm with a turnover of less than Rs.10 lakhs per annum
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  • Standard Package
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  • Income tax return filing + Accounting + Compliance management for a partnership firm with a turnover of less than Rs.500 lakhs per annum
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  • Premium Package
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  • Income tax return filing + Accounting + Compliance management for a partnership firm with a turnover of less than Rs.100 lakhs per annum
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Frequently Asked Questions
Should a partnership firm be registered?

There is no provision under the partnership Act, 1932 which mandates the registration of partnership. However, the act itself provides for the procedure of registration of firm. Thus the registration is optional but highly recommended, as an unregistered firm shall not be able to recover any money in excess of INR 100/-. Apart from the above legal impediment, from the practical point of view also the firm should get registered in order to bring certainty in the relationship of partners and the firm per se.

Is a written partnership deed necessary to form a partnership firm?

No, it is not necessary. As the contract act does not makes it necessary to have the agreement in writing. However, it is always prudent to make a partnership deed to produce to the bank, income tax authorities and to clients with whom the partnership firm deals with. Apart from serving as a reference document a written partnership deed also helps in reducing conflict and confusion in due course of time.

Can a partnership firm be sued in the name of the firm?

Yes. A partnership firm can sue or be sued in its own name. The firm is treated separately from its partners. However, the partners do not enjoy limited liability as available in case of LLP or a company. In a situation where the firm is not in a position to discharge its liabilities, the partners shall be called in to pay the liabilities of the firm.

Can a partnership be constituted for a particular business undertaking?

Yes. A person may become a partner with another for a single adventure or undertaking. The term of partnership firm can be for a specific period or for the completion of a specific project or at will. The deed must have a specific mention about the tenure of the partnership agreement. The Even partnership which is created for a specific purpose can be closed before the term with the consent of all the partners.

Am I personally liable for my business under a sole proprietorship?

Yes. Unlike other incorporated business forms, you are personally liable for any of your sole proprietorship’s debts or legal judgments against your business. This means that in order to satisfy debts owed by your business, debt collectors can come after your personal assets, homes, cars, etc. For this reason, alone, you should be extremely cautious about setting up a sole proprietorship. Setindiabiz.com recommends One Person Company in place of proprietorship.common-question-bottom

Can one deal with one of the partners of a partnership firm?

Yes. The law presumes that each partner is an agent of the other and while dealing with third parties the partner is representing the partnership firm in good faith. The acts done by one partner is binding on another even if it is not in the knowledge of the other party.

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