Overview on Partnership Firm
Partnership registration does not allow the firm to become a debtor, creditor, or property owner. Instead, the partners are held responsible for the assets, liabilities, and credit of the partnership firm, as per the law. It is crucial for the partnership agreement to explicitly state how profits and losses will be shared among the partners to prevent any misunderstandings in the future. In a partnership firm, each partner can act as an agent for the other partners when conducting business. Registering as a partnership firm is a suitable option for certain businesses, particularly home-based ones that are unlikely to incur significant debts. This is because it is a cost-effective and simple registration process with minimal compliance requirements. General partnerships have an optional registration process. If there are no more than two partners left in a partnership firm due to a partner’s death, incapacitation, or resignation, the partnership firm registration will be terminated.