Partnership

A partnership is an agreement in which parties, called business partners, agree to collaborate in pursuing their mutual interests. Individuals, companies, interest-based groups, colleges, states, or combinations can be partners in a partnership.

 Elements:

The Indian Partnership Act, 1932, governs the setup and workflow of partnership firms in India. According to Section 4 of the Indian Partnership Act, there are five elements that constitute a partnership, namely:

1. There must be a contract;
2. Between two or more persons;
3. Who agree to carry on business;
4. With the objective of sharing profits; and
5. The business must be operated by all or any of the partners, acting for all.

All of the five elements mentioned above must coexist to constitute a partnership. If any of these is not present, there cannot be a partnership.

Form E-

This Form E is required to be filed as an undertaking under section 63. Form E is required to be filed in case of Change in constitution or Dissolution of the firm. After the filling of Form E, the same is to be printed on green ledger paper signed by all partners, and submitted with other relevant documents. The Fee for the Form E application online is Rs. 1200 (plus service charge and GST).

What do you mean by change in the constitution of the Partnership Firm?

Section 63 of the Partnership Act states as follows, “When a change occurs in the constitution of a registered firm any incoming, continuing or outgoing partner, and when a registered firm has dissolved any person who was a partner immediately before the dissolution, or the agent of any such partner or person specially authorized in this behalf, may give notice to the Registrar of such change or dissolution, specifying the date thereof; and the Registrar shall make a record of the notice in the entry relating to the firm in the Register of Firms, and shall file the notice along with the statement relating to the firm filed under section 59.”

Explanation: the changes in the incoming that is the addition of a new partner, or the outgoing of partners are to be intimated to the Registrar of firms within 90 days of such changes. 

A new Partnership Deed is required to be Drafted stating the changes in the constitution of the Firm. The Copy of the Old partnership Deed is duly attested is required and other relevant documents are to be submitted. ID Proofs of all the partners, along with the newly admitted partners, if any, duly attested. Passport-size photographs of all the partners along with the newly admitted partners, if any are required.

What do you mean by Dissolution of Firm?

Reasons for Dissolution of Partnership Firm:

The following are reasons for the Dissolution of the Partnership Firm

1. Mutual Consent of partners: All partners mutually agree and enter into the agreement for the dissolution of the partnership.


2. Mandatory dissolution- When any or all partners are declared insolvent. Where there are 2 partners and on dies a partnership firm can get dissolved, in case of unlawful trade practices carried by the firm, if a partnership was for a fixed period then the partnership can get dissolved on expiry of its term.


3. Notice of Dissolution: A partner can serve a notice on other partners for the dissolution of a partnership.


4. The intervention of court- in case of a dispute the partners can sue or can be sued by a third party and the firm can get dissolved, or where a partner turns lunatic and cause a nuisance to other partners they can file a case for dissolution of the partnership. It is to be noted court can intervene only in the case of a registered partnership firm.
   

Documents to be submitted while filling FORM 'E'

*Mandatory Documents

1. Upload Form E (Filled in form E with Sign.)

2. Hamipatra AB

 3. Copy of the Registration Certificate.

 TAXAJ is a consortium of CA, CS, Advocates & Professionals from specific fields to provide you a One Stop Solution for all your Business, Financial, Taxation & Legal Matters under One Roof. Some of them are: Launch Your Start-Up Company/Business, Trademark & Brand Registration, Digital Marketing, E-Stamp Paper Online, Closure of Business, Legal Services, Payroll Services, etc. For any further queries related to this or anything else visit TAXAJ