(12) Lack of legal status: The Indian Partnership Act of 1932 does not give the partnership independent legal status. Since registration is not mandatory, except in some countries, no distinction is made between a partnership company and its partners. [vi] If you enter into a business partnership, you must: 5th Partnership Registration Certificate (if a partnership has been registered) As part of a partnership, you and your partner (or partner) personally share responsibility for your business. These include: [ix] Wiki How Staff, How to register a partnership firm in India, WIKIHOW (February 22, 2020, 12:06), www.wikihow.com/Register-a-Partnership-Firm-in-India. [iv] Surendra Naik, What are the Advantages in Registration of the Partnership Firm, BANKING SCHOOL (February 22, 2020, 9:53 p.m.), bankingschool.co.in/legal-and-regulatory-aspects-of-banking/what-are-the-advantages-of-registration-of-a-partnership-firm/. Tip: As registering a partnership is optional, you can register the partnership before you start your activities or at any time after. You don`t have to wait until the registration is complete to make transactions under the name of the partnership. Although the act of partnership may be oral, an act of partnership is usually drafted to avoid future conflicts. The partnership letter is drawn up on a court stamp document of Rs. 2,000/- and must be signed by all partners. It contains rights and duties of the company and partners. (6) The absence of a separate legal status: a company is not an artificial person like the limited company. He is not recognized as a person by law.
The existence of the company is linked to the partners. The partner`s insolvency is the insolvency of the company. The partnership agreement must define how profits and losses are distributed among partners. A non-profit hospital, an educational institution run jointly by like-minded people, should not be considered a partnership because there is no sharing of profits or losses. However, mere profit-sharing is not conclusive evidence of a partnership. In this sense, employees or creditors who share profits can only be called partners if there is an agreement between the partners. To be legal, your partnership must be printed on stamp paper and signed by each partner.