Know About Partnership business in India
India is known as largest and fastest growing economic in the world. Entrepreneurs enter to Indian market with deep long-term commitment and a vision to create an entrepreneurial society by bringing innovative technologies. However, a business cannot go beyond a certain limit solely. A very fresh example of new Indian business partnership nowadays is Strategic partnership between Times of India Group and Uber. Times of India group will support Uber to expand their business in India. This is initiation of Times group toward the support of emerging global digital companies in India.
What is Business partnership in India?
“A partnership is the relationship between persons who have agreed to share the profits of a business carried on by all or any of them acting or all. In India it is governed by the Indian Partnership Act, 1932”. First and foremost, Firm willing to develop strategic international partnerships with India should be well aware that they need to be in business for the long run.
According to Indian Partnership Act, following can enter into a business partnership:
- HINDU UNDIVIDED FAMILY
To start a partnership business in India, there must be an agreement between all the partners. This agreement must contain-
- The amount of primary investment contributed by each partner
- Revenue or loss sharing ratio for each partner
- Income or commission payable to the partners, if any
- Duration of partnership, if any
- Name and address details of the partners and the firm
- Duties and powers of each partner;
- Nature of business; and
- Agreement on each and every terms and conditions to run the business
A partnership agreement when stamped and registered is called “partnership deed”. The partnership deed is mandatory for any kind of business partnership and it is not very hard to prepare. This can be prepared by any trusted local lawyer. Registration of a partnership firm in India is not mandatory; it solely depends on the business partners. However, if a third party comes in between, to take a legal action, registration of the firm is required.
Advantages of a Business Partnership:
- Partnerships have many of the same advantages of the sole proprietorship, along with others:
- Despite all of the legal cost of crafting a partnership deed, it is easy to establish.
- Because of more than one owner, the entity has more than one sources of Capital to the financing the business
- Profits flow directly to the business partners personal tax returns; they are not subject to a second level of taxation.