Formation of Partnership Business
When two or more persons agreed to form a business and run by them with a view to earning a profit is called partnership business. Partnership business deals with earning profit taken by partners equally or as par the condition of partnership deed. The formation of the partnership business is not as difficult as it management under the legal formalities closely. The registration of these sorts of the firm is not mandatory. But deed formation is mandatory. The system and procedure for forming a partnership business are as follows:
Initiating more than one member: Partnership business is an association of more than one member, termed as a progressive business organization. The minimum members are 2 and the maximum is 20, but in terms of the banking business, it is 10.
Making contractual relation: Partnership is the result of a contract. It is handled and maintained by an association of members on the basis of a deed.
Registration: The registration for it is not mandatory as per the Partnership Act 1932. In case, it is one the business as well as partners will get an extra benefit and the silent benefit is acquired. In the public who laid their confidence in business. For registration, it is needed to submit an application form in the registered office. If the register is satisfied to observe the conditions of the firm then he approves to run the business.
Collecting licenses: After completing the registration related activities, this is needed to collect license from a specific authority of government. The license is collected from union-parished or City Corporation or related department of government on the basis of the category of business. For import-export business, travel agency business the license is collected from import-export run office and government and parjatan department respectively.
Starting the business: After completion of the above whole formalities, partners can start a real business as a whole. Here real business means; production, trading, and servicing for earning a profit. Indeed the real activities of business start this level or point.
From the above discussion, it is concluded that the formation of the partnership business is needed to carry some formalities that specify the objectives of the partnership business.