Is a Partnership Firm a Trading Concern?

by  Adv. Priyanka Sampathy  




3 mins


partnership firm is a trading concern

 A Partnership Firm is a trading concern, and the main goal of forming a Partnership Firm is to maximize profits, and this is done either by manufacturing or distribution activities which will increase revenue.

The profits are then divided between the partners in an equal percentage or as decided by them according to the capital contribution. A Partnership Firm is a trading concern in this respect as it can indulge in the distribution and sale of goods and services to earn more profit.

What are a Partnership Firm and its registration process?

  • When two or more individuals form a mutual agreement to commence business together and share the profits and losses equally, it is known as a Partnership Firm.
  • The main objective is to earn maximum profit and financial stability, and we can say that partnership is a trading concern.
  • It is not distinct from the members, and the Partnership Firm is a trading concern that can be registered under the India Partnership Act 1932. Their mutual interest is classified in profession, trading, or occupation.
  • A Partnership Firm is a trading concern of all sorts as it also can maximize profit through reselling goods and services.

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The registration process 

  • A Partnership Firm is a trading concern, and its registration is not mandatory, but there are certain merits involved that can be very advantageous for the company as a whole. The registry is governed under the Indian Partnership Act 1932.
  • It is not a separate legal entity from the members. A Partnership Firm is a trading concern and can be registered as such under the law.
  • The partnership deed contains every detail and information regarding every partner, the type of business, and the ratio in which profit and loss will be shared to avoid future disputes.
  • This deed is certified by the registrar for completion of the process that the Partnership Firm is a trading concern and can be registered as one and entered into the government database after every criterion is fulfilled.

The process of firm registration in Telangana

It is available online and offline for firm registration in Telangana.

In Telangana, the registration process for Partnership Firm can be fulfilled through the Registration and Stamps Department of the Telangana Government.

  • An individual can fill out an online registration form and upload the necessary documents for authorization.
  • The registration fees and taxes must be cleared through the online portal.
  • The original documents must be sent to the District Registrar’s office by courier service or by drop box situated in the registrar’s office.
  • The documents will be first checked and certified by the Sr Assistant level, and after the verification, the documents are sent to the District Registrar for approval with a recommendation.
  • The District Registrar approves based on the recommendation, and the registration certificate is digitally signed.

If the registration is not successful, then the necessary changes are to be made to the application. It can also be verified when the Partnership Firm is a trading concern. It is suggested that one must take legal consultancy services before the registration process to avoid such situations where the application can get cancelled or annulled.

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What is a trading concern?

The trading concern is the type of business where revenue is obtained through the resale of goods or products. The products are purchased through different manufacturers and producers to resell them to maximize profit. A Partnership Firm is a trading concern that falls under the commercial category, where revenue is the act of purchasing and reselling goods and services. The Partnership Firm is a trading concern and is similarly aiming to maximize profits.

An example of a trading business that also applies to the partnership as a Partnership Firm is a trading concern.

  • Jewellery reselling and trading
  • T-shirt selling
  • Stock market trading
  • Customized goods and products (gifts)

What is a non-trading concern?

A non-trading company is a type of business whose main goal is not to make most of the profits but to contribute to the betterment of society and fulfil the needs and wants of people. They aim to provide benefits to members of the community. The benefits vary from financial, medical, technical and educational, etc. The partnership type of business can also be non-trading, but most Partnership Firm is a trading concern.

The individuals or institutions which are non-traders carry on activities other than trading.

Example of non-trading concerns:

  • Hospitals
  • Libraries
  • Colleges
  • Schools
  • Athletic institutions and sports clubs.

Difference between trading and non–trading concern 

What is the sole trading concern?

A business or organization which is managed by a sole trader is known as a sole trading concern. It is not controlled by other individuals but only the owner. The Partnership Firm is a trading concern but is owned by two or more individuals.

A Partnership Firm is a trading concern where two or more individuals are connected, but sole trading involves only one person.

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The Partnership Firm is a trading concern and also non-trading if the members decide so. But the added benefits are to maximize profit in both ways. There are many advantages and disadvantages involved which characterize the business and its types. 

The Partnership Firm is a trading concern and can be complicated, so it is recommended that an individual goes through legal consultancy services to gain knowledge and solve related queries and handle the trading more effectively.

The Partnership, which acts as a trading concern, should be registered to avail added benefits, and an individual can take legal consultation to enhance their clauses and management.

Adv. Priyanka Sampathy

Adv. Priyanka Sampathy


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Priyanka Sampathy is a legal consultant who prioritises ethical and professional conduct while striving to achieve desired outcomes. With over 15 years of independent practice, she has significant expertise in handling legal cases. Her exceptional communication skills enable her to express arguments in a clear and persuasive manner, both in writing and verbally, in Hindi, English, and Telugu.

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