Clear Comparison between Partnership Firm and Proprietorship in India
In India, the two most popular and common form of performing business is through a partnership or a proprietorship firm. The Proprietorship Compliance in India is the simplest form of performing business with minimum paperwork and is perfect for businesses that are in initial stages or need less capital. On the other Partnership Firm Compliance is slightly advanced but has a host of benefits on offer compared to proprietorship, which is worth the little extra effort of setting up the partnership. Key Benefits of a Partnership Firm over a Proprietorship • More people mean more capital to function. 2 or more people may fund more money than a single individual. • Allows for pooling resources of different individuals with respect to cash, assets, knowledge, labor, etc. • The income from the partnership is directly reported on the personal income tax return and does not require a host of compliance at the partnership level. • Risk and profits are diversified. One individual ...