A bill amending the Companies Act, 2013 and decriminalizing various compoundable offenses was passed by the Indian parliament on 22 September 2020. In this way, small companies, partnership firms, and LLPs are relieved of the burden of litigation. According to the honorable Finance Minister, fraud, deceit and injuries to the public interest will be dealt with firmly.
How Does a Partnership Firm Work?
A partnership firm can be formed by two or more individuals either orally or in writing. The Indian Partnership Act of 1932 governs these firms.
According to section 4 of this Act, a partnership firm in india is a relationship between people who agree to share the profits of a business operated by all or any of them. Through this relationship, the partners agree to share the profits of a business run by all of them or by any of them.
The importance of a PAN card for a partnership firm
All taxpayers must possess a PAN (Permanent Account Number). An individual or business generating income must have a tax identity as stipulated by the Income Tax Act of 1961. Regardless of whether a partnership firm is incorporated abroad or in India, it must have a business pan card.
PANs are primarily used to track and prevent tax evasion. In addition, if you do not have a pan card in the name of the partnership, you cannot take advantage of the tax benefits offered by the government. Additionally, you will have to pay taxes at the highest rate.
If you do not yet have a PAN card, it’s time to get one.
PAN Card Application Criteria for Partnerships
A pan card can be obtained by a company by providing a few important documents. An application for a pan card requires the following documents for a partnership firm:
- Registrar of Firms Certificate of Registration or Partnership Deed
- A proof of the address of the firm’s registered office
- If the payment is to be made offline, a Demand Draft of the requisite fee is required.
- The partnership deed should be duly attested
- It should define any one of the partners as the managing partner. He will be the signing authority on behalf of the other partners
- It should clearly mention the address of the firm and the date of the formation of the said partnership
- A rubber stamp bearing the firm name should be made. It should also mention the word ‘partner’ at the bottom. The managing partner can use this stamp while signing the pan card application form for the firm.
Online PAN Card Application for Partnership Firms
You can apply for a pan card online by following this Step-by-Step procedure –
Click here to visit the NSDL website for paperless PAN applications
Choose ‘FORM 49A’ from the ‘Application Type’ drop-down menu. Select ‘Firm’ in the drop-down menu under ‘Category’.
Fill in the appropriate boxes with the details of your partnership firm. After filling out the details, enter the Captcha code and click ‘Proceed’. Your email address will be sent a token number generated automatically.
Your firm’s source of income needs to be specified on the next page. In the ‘Income from business/profession’ section, select ‘Income from business/profession’. Check the appropriate buttons if you have income from other sources. Please include your office address as well. On the PAN database, this will remain the official communication address of your firm.
Your AO (Accounting Officer) code must be entered in this step. Depending on your jurisdiction, this will vary. To become an Indian citizen, click on the ‘Indian Citizen’ button and choose your state and city.
The firm’s pan card documents can be uploaded at this stage. Please refer to the previous section in this blog for more information about the documentation criteria.
Upon filling out the form, you will be able to review the same. If there are no errors, click the ‘submit’ button.
The application fee must be paid in this step. Demand drafts, debit/credit cards, and net banking are all acceptable methods of payment.
You can check the status of your PAN card application online at the NSDL website with the acknowledgement number you receive when you submit your payment.
The following documents need to be sent to NSDL via postal mail:
- Receipt of acknowledgement signed.
- A copy of the certificate of registration for the company or the partnership deed.
- If payment is made offline, a demand draft is required.
You must deliver the hard copies to the NSDL office within 15 days of applying for a Pan card. Your application and accompanying documents will then be verified by the department. Within 15 business days, you should receive your PAN card if everything is in order.