Skip to main content

Partnerships Firms

By

Types of Firms

1-    Proprietary Firms

2-    Partnerships Firms

3-    Joint Stock Companies

Partnerships Firms

More than two firms but less than 20 persons come to and build a business and operate it.

Each parent is the owner of the business and owns the profits/loses made in the proportion decided prior to setting up the business. This type of relationship is governed by the conditions laid down in Partnership Deed.

  • Its easy & economical to operate.
  • There are more resources to handle the complex issues and operations.
  • At present the tax works out to be = 30%+ 10%+ +2%= 33.66%

Expenditure allowed

  • Can pay interest on the capital to the partners on the amount of capital put by them in the business at the rate of interest of 12%
  • Firm can remunerate parents in the for of bonus. Salary commission etc provided partner takes part in the day-to-day operations of the firm and act as a working Partner. The remuneration is calculated as follows -

Professional Firm

    • On the first Rs 100000 of the book profit or in the case of the loss = Rs50000 or 90% of the book profits whichever is more.
    • On the next 100000 of book profits at the rate of 60%.
    • On the balance amount of book profits at the rate of 40%.

Any Other Firm

o        On the first Rs 75000 of the book profit or in the case of the loss = Rs50000 or 90% of the book profits whichever is more.

o        On the next 75000 of book profits at the rate of 60%.

o        On the balance amount of book profits at the rate of 40%.

Disadvantages

  • Do not have a legal status
  • Unlimited liability firm therefore personal property of the owners was always at risk if it runs into loses.

Comments

Post a Comment

Popular posts from this blog

Biotech Regulatory Authority bill a huge Step for Future Market Development: Environment Minister

By
Biotech Regulatory Authority bill a huge Step for Future Market Development: Environment Minister Description  :  Industry Date  :  Aug-19-2010 The Biotechnology Regulatory Authority bill, scheduled to be introduced in Parliament imminently, will not open the floodgates to genetically modified (GM) food. Environment Minister Jairam Ramesh said, "I believe that when the Bill will be introduced, it will address the concerns that have been expressed by the civil society groups that it will open floodgates for all GM foods. Nothing like it". He further added, "It's just exaggerated notion of non-reading of the Bill. Once it is presented in Parliament, we all will see that the integrity of environmental assessment process has been maintained" The Bill seeks to create a new body to regulate research, manufacture, import and use of products of modern biotechnology. The need for a biotech regulator was highlighted during the recent controversy over introduction ...
Post a Comment
Read more

RBI gives Infrastructure Finance Company status to PTC India Financial Services Limited (PFS) a subs

By
RBI gives Infrastructure Finance Company status to PTC India Financial Services Limited (PFS) a subs Category  :  Corporate News Date  :  Aug-24-2010 09:52 PTC India Ltd has informed regarding a Press Release titled RBI gives Infrastructure Finance Company status to PTC India Financial Services Limited (PFS) a subsidiary of PTC
Post a Comment
Read more

Fixed Assets Management

By
Fixed Assets Management - Capital Budgeting Decisions Fixed assets are like the properties, infrastructure facilities that are required by the business operations to complete successfully. A finance executive has to evaluate and decide on which fixed assets the company should invest so that company can perform all its current and proposed future functions. There are various techniques that are available and that can be used by the finance department to evaluate various proposals for the investments like - pay back period, Net Present Value, internal rate of interest, profitability index. Once the economic value of those fixed assets gets over than a proper depreciation policy should also be formulated.      
Post a Comment
Read more