A sole proprietorship is a one-owner operation. It is a business structure that is common for a small shop owner or professional artist. But if you want to share ownership of a business with another party, you must convert the proprietorship into a partnership.
1) Minimum 2 member
2) Agreement between partners
3) Drafting of Partnership deed.
4) Decide Profit sharing ratio
5) Mutual agency
6) Choose Name
7) Declaration of Transfer
8) Include Important Information
a) Date of Starting of sole proprietorship
b) The name of the proprietor
c) Type of business
d) GST registration
e) Bank account Details
f) Investment Details
A minor is incompetent to contract.
The profits arising from the business can be divided among the partners according to a previously agreed ratio based on the capital invested or equally. A partnership would better than a sole proprietorship in case the business is growing. It would be ideal to expand by introducing fresh capital and innovative ideas by new partners. Collective ownership also results in combined decision making which would be better than individual decisions. Execution of plans can also happen better with increased strengths and investments.
1) Is Partnership Registration is Mandatory?
It is not mandatory a partnership firm Registration should be registered; however, there are various advantages of a registered partnership firm so it is recommended that a partnership firm should be registered. A registered firm can file a suit against the partner or a third party or can recover its dues.