Queries on partnership firm

Others 741 views 2 replies

C Reddy

Entreprenuer

133 Points Posted on 15 June 2015

Respected Members,

We are planning to start a Partnership Firm providing software services. We have the following queries:

1. It is not necessary to register a partnership firm, a Partnership Deed would suffice, should we register the Partnership Deed?

2. Is it necessary to audit the accounts of the partnership firm on an yearly basis like a statutory audit for companies? Tax audit is applicable only when the turnover crosses Rs.40 lakhs, until then are there any other audits?

3. Can the current account of the partner be used for banking purposes? Or should the partnership firm have a separate bank account for accounting purposes?

Thank you in advance.

Regards

Chandana

Replies (2)

CMA Poornima Madhava

CMA

13117 Points Posted on 15 June 2015

Registration of partnership deed is optional
Tax audit u/s 44AB for firm is applicable if gross receipts/turnover exceeds 1 crore
Firm should have a separate bank account in its name

For more details: https://www.charteredclub.com/register-partnership-deed/

Rashi Bajaj

752 Points Posted on 17 June 2015

Dear Sir,

1. Registration of deed is optional, but it is better in many ways (especially legally) to have it registered.

2. Tax audit u/s 44AB for firm is applicable if gross receipts/turnover exceeds 25 lakhs(as you are a service provider/professional)

3. It is better to operate the firm's transactions throuh a separate bank account. Same bank accounts lead to confusion and penalties in case of tax scrutiny.