In this article, we discuss what type of businesses can register as a affiliate
An affiliate, in simple terms, is an agreement with two or more individuals or parties to work together for a common goal. So, an affiliate business is an organisation that comprises at least two people that come together to conduct business on the decided terms. The terms and conditions of such firms are outlined in an agreement. Continue reading to know about the steps involved in affiliate business registration.
Let’s discuss what type of businesses can register as a affiliate.
What Types of Businesses Should Register As a Affiliate Business?
Small businesses usually have a sole proprietorship, which is ideal when one person can easily handle the business needs. But as the business grows and demands more than one skill set, a salesman, and a management person, for example, small enterprises turn towards the affiliate form of doing business.
Affiliate business are ideal for:
- Family businesses that have siblings, husband, and wife, parents and children, or cousins working as partners
- Businesses that require a different skill set, managerial talent, and expertise like legal firms, construction firms, etc
- The businesses that want to avoid the several complex compliance requirements for flexibility of operations
- Further, businesses like small manufacturing units, wholesale and retail trade, etc. that have a medium capital requirement.
An agreement that defines the terms and conditions among the various parties involved in a affiliate is termed a partnership deed. The partnership deed format covers the following details:
- A business that is being or to be undertaken by the firm
- The Duration for which the affiliate is being made, for example, a limited period, say 5-10 years, or a specific project
- Details about the partners, like their names and addresses
- The name of the affiliate
- The date from when the firm commenced its operations
- Investments made by each partner of the firm
- The ratio of profit and loss that is to be shared among the partners
- The rules and regulations pertaining to the removal or intake of partners
- Obligations and duties of the partners involved
- The type of affiliate
Steps Involved in Registering Affiliate Business
The registration of a affiliate is not compulsory but is advisable because you cannot bring any case related to it in court without registration. The procedure for registering a partnership company is fairly simple:
- Application in Form A for the registration of the affiliate to the Registrar of Firms along with the following
- Duly signed/certified copy of the affiliate deed
- Necessary stamp duties and fees
- After the registrar’s approval, a certificate of incorporation is issued and the firm is added to the records
You can consult your chartered accountant or hire a lawyer to proceed with the registration of your affiliate firm or can for the affiliate firm registration online. Additionally, companies like VakilSearch specialize in services like affiliate registration also offer the necessary basic legal advice with the help of their team of advocates and legal experts.
Benefits of a Affiliate Business Registration
- A written and registered agreement serves as a formal agreement between two or more parties. Hence, a affiliate deed serves better than an oral agreement.
- Also, a affiliate deed also clearly states the rules and regulations, as well as, profit sharing ratio, to be followed by partners.
- A partnership deed helps in avoiding confusion among partners of the firm, as it clearly states the details of each partner.
- In the event of a dispute, partners can refer to the affiliate: https://www.mca.gov.in/MinistryV2/registration.html deed to resolve disputes.
What Are the Checklist Clauses of a Affiliate Deed Format?
- Company name and address on the affiliate deed of a firm
- Partner Details on the affiliate deed of a firm
- Partner Capital Contribution
- The Accounting period on the affiliate deed of a firm
- AffiliateFormation Date
- Rules of Operations for Bank Accounts as stated on the affiliate deed of a firm
- Profit and loss sharing ratio
- The rate of interest on capital, loan, drawings, etc
- The rules to appoint the auditor
- Payables to partners
- The rights, duties, and liabilities of each partner
- Rules & regulations to be followed when it comes to the dissolution of the firm
- Rules & regulations to be followed when it comes to admission, retirement, the death of a partner.
- Sharing of Profit and Loss in Partnership
- What are the Advantages of Partnership?
- Details about Firm and Company Difference
- Partnership Pan Card Documents
- Retirement of a Partner