Partnership Firm

Partnership Firm

Managed and  owned by the single person like (traders , small manufacturer) who have only  tax registration for their business.

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Key Features of Partnership Firm

  • 2 Person Required as Partners.
  • Partners share responsibilities and duties of the business.
  • More capital can be brought into the business.
  • Partners share responsibilities and duties of the business.

Disadvantages of Partnership Firm

  • Unlimited liability
  • Disagreement among the partners.
  • Can not raise funds easily from investors.
  • Less Features as Compare to LLP Formation with same cost of formation

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FAQs

Who can start Sole Proprietor Firm?
Any Indian citizen with a current account in the name of their business can start a sole proprietorship. Registration may or may not be required, depending on what business you are planning to establish. But to open a current account, banks typically require a Shops & Establishments Registration.
What documents are required to start a sole proprietorship?

To start a sole proprietorship, you would need address and identity proofs, PAN card, all KYC documents and rental agreement or sale deed (in case of Shops & Establishment Act Registration).

Can I further convert my business from sole proprietorship to private limited company or LLP?

You can do this if you want. The procedure for this conversion is a little tedious, but it is possible. It is very common for sole proprietors to convert into partnerships and private limited companies at a later stage.

Compare and Select


Suitable for

Ease of accomodating Investment

Tax Benefits

Perpetual Existance

Statutory Compliance

Private Limited Company

Startups and growig companies

Very easy

Few benefits

Yes

High

Limited Liability Partnership

Professional services firms

Possible, but unlikely

Most efficient

Yes

Low

One Person Company

Sole Promoters

Possible, but serverely unlikely

Few benefits

Yes

High

Partnership Firm

Home businesses

Almost impossible

Minimal

No

Minimal

Sole 

proprietorship

Small traders and manufacturers

Possible

Minimal

No

Minimal

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