Starting e-commerce business with partnership is more suitable for e-commerce than sole proprietorship. It is a form of business where more than one individual is the owner. They share management as well as profits and loss.
The features of Partnership are:
- Not a separate legal entity
- Unlimited liability
- Minimum 2 and maximum 50 individuals can make a partnership
- Partners are mutual agents
- Oral or written agreement
- A partnership deed has to be made and maintained
The advantages a partnership enjoys are listed below:
- Easy to setup
- Pooling in of skill as different partners have different skills
- Greater capital capacity
- More brains to think
- Division of work makes work quick and easy
- More loan taking capacity
- Flexible legal structure
- Tax savings
- No need for yearly return filling
The documents needed for registration are:
- Identity proof of partners
- Address proof of partners
- Specimen of affidavit
- Copy of partnership deed
These steps need to be followed for registering a partnership.
- Obtain DIN and DSC and DPIN
- Obtain pan/tan
- Drafting of partnership deed
- Registration of partnership deed
- Fill up form 1 (application for reservation of name or change of name)
- Fill up form no 2 (incorporation documents and subscriber’s statement)
- Ownership proof of the office
A partnership deed contains the following:
- Name of partners, all parties
- Start date of the partnership
- Duration of the partnership
- Type of business
- Name of firm
- Initial capital investment
- Profit/loss sharing ratio
- Steps to be taken in the winding up of the business
- Steps to be taken at the death of a partner
- Division of property after winding up of business
- Role of each partner
- Rights of each partner
- Liabilities of each partner
Types of partners in partnership
- General partner: a general partner is one who provides capital and actively takes part in the management of the business. He/she also shares profits/ losses.
- Limited partner: a partner is said to have limited responsibility when he contributes to the capital only without taking responsibility for any management work. He is exempted from taking all the liability of the company.
- Silent partner: this partner invests in capital for a return but neither takes part in the management nor wants to reveal his association with the firm publicly. Therefore his name is seldom referred to and although a partner, he/she is only concerned with the profit returns.
Registering a partnership company like peaks digital marketing the costs depends on the requirement of the client.
It takes from 7 to 14 days to get a partnership firm registered.