LIVE GST Certification Course by CA Arun Chhajer begins 27th April. Register Now!!

Queries on partnership firm

C Reddy (Entreprenuer) (133 Points)

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

Reply
Follow
Share

2 Replies

CMA Poornima Madhava (CMA) (13097 Points)
Replied 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/

1 Like

Rashi Bajaj (CA) (752 Points)
Replied 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.

1 Like