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Quick Summary
A partnership refers to a legal and business relationship between two or more individuals who share the ownership and management of a company. Partnerships are a form of business structure in which the partners contribute capital, share in the profits and losses, and participate in the decision-maki
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FAQ :
A partnership is characterised by an agreement between partners, a common goal, sharing of gains and losses, business activity with a profit motive, partners acting as owners and agents, unlimited liability for general partners, and restrictions on transferring interests.
In a General Partnership, all partners share equally in profits, losses, and have unlimited personal liability. A Limited Partnership has general partners with unlimited liability and management control, and limited partners who invest but have limited liability and less control.
A Limited Liability Partnership (LLP) is a structure where partners have limited liability, meaning they are not personally responsible for the firm's legal and financial obligations.
A Partnership at Will is formed without a specific duration or purpose and can be dissolved at any time by any partner giving notice to leave.
A partnership firm with total income up to ₹50 lakh, whose income from business or profession is computed on a presumptive basis, may file ITR-4. Firms and LLPs can file ITR-5.
Limited partners typically cannot offset partnership losses on their income tax return due to their non-involvement in the management of the business.
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