Minimum Capital required for Partnership Firm
In India, in case of Private Limited Company, OPC , Public limited company there is a requirement of minimum capital. However there is no Minimum capital required for partnership firm. Legally there no concept of minimum capital requirement in case of partnership firm. In Partnership firm Partners mutually decide minimum capital for firm registration.
Partnership is business agreement between two or more persons who have agreement to share profit and loss. Partners mutually decide roles and responsibilities. Also once partners start partnership business there is no requirement to show decided capital to Register of Firm. In partnership firm minimum capital can be given in kinds. For Example Mr. A & Mr. B decided to register partnership firm for Car Showroom with capital of say Rs. 100 lac in 50 % 50 % percentage. After mutual decision Mr. A how have Property of Rs. 50 lac deiced to give it to firm for use as capital.
Partners can fulfill minimum capital required for partnership firm in kinds such as Computer , Land , furniture , inventory , cash etc. Also Minimum capital requirement of firm can be full filed in Intangible assets such as Goodwill , patent etc. By using such intangible asset model many startups started expanding business with these business models. Normally startups register partnership firm with capital of Rs. 50,000 / Rs. 1,00,000/-.
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Capital Contribution Clause in Partnership Deed
Partnership deed is agreement between partners. After mutual decision and considering future expenses of firm partners need to mention capital contribution of firm. Profit and loss sharing and capital contribution sharing ration between partners can be different.
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Points to decide Minimum capital required for partnership firm
- Capital Investment in Firm
- Initial Operating expenses of firm
- Partners Salary
- Employee Salary
- Initial non operative expenses
- Minimum bank balance requirement
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Types of capital in partnership firm
Partners can invest in partnership firm in below forms
- Bank transfer
- Land / Building / office place etc.
- Inventory
- Car / Bike etc.
- Cash
- Goodwill / patent
- Computer , server etc.
- Furniture
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Conclusion : –
There is no minimum capital requirement to form a Partnership Firm registration. Partners can mutually decide minimum capital of Firm. After deciding future business running expenses partners can arrive at amount which is required to start partnership business. Even as needed after registration partners can change the minimum capital of the partnership firm.
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