FIRM

“Firm" typically refers to a business entity that provides professional services. These
services can range from legal and accounting services to consulting, engineering, and
more.

Associate Firms
Defin ition: Asso ciate firms, also known as affiliated firms or partner firms, are businesses that
hav e established a fo rmal relationship with another firm for mutual benefits. This relationship
can tak e variou s fo rms, such as partnerships, collaborations, or alliances.
Characteristics: Mu tual Interests: Associate firms form partnerships based on shared goals,
comp lementary streng ths, or a desire to leverage each other's resources for mutual benefit.
Collab oration Agreemen ts: Th e relationship between associate firms is often formalized through
collab oration agreemen ts, wh ich outline the terms, responsibilities, and benefits of the
partn ership.
Specialization: Associate firms may specialize in different aspects of a broader industry, and by
collab orating, th ey can p rov ide clients with a more comprehensive range of services.Shared
Resou rces: In so me cases, asso ciate firms share resources, such as expertise, technologies, or
client networks, to en han ce their overall capabilities and competitiveness.
ASSOCIATE FIRMS IN PROFESSIONAL PRACTICE
Collaborative Relationships:
Joint Ventures : Associate firms may enter into joint ventures with other entities to collaborate
on specific projects. This allows firms to leverage each other's strengths and resources.
Strategic Alliances : Firms may form strategic alliances with other businesses to enhance their
service offerings or expand their geographic reach. These alliances are often based on mutual
benefits and shared goals.

Specialized Contributions:
Complementary Services: Associate firms might offer services that complement those of
another firm. This collaboration allows Sharing: In certain projects, associate firms may share
resources such as facilities, equipment, or specialized personnel to achieve common goals
efficiently .
Risk Mitigation: Diversification clients to access a broader range of expertise through a single
engagement.
Resource : Associating with other firms can provide risk mitigation by diversifying the types
of projects a firm undertakes. This diversification can be particularly beneficial in
unpredictable economic environments.
.
Shared Responsibilities
Associate firms can share responsibilities and risks, leading to a more balanced and
resilient business model
TYPES OF OFFICES & PARTNERSHIP

Limited liability partnership

Coworking space
PartnershipLimited partnership
Virtual office
Private office
Limited liability partnership
Limited Liability Partnership (LLP) has become a preferred form of organization among
entrepreneurs in India. An LLP incorporates the benefits of a partnership firm and a company.
As the name suggests, an LLP is a partnership firm established by a minimum of two partners
who enter into an LLP agreement
Coworking partnership

A coworking partnership refers to a collaborative arrangement between a coworking space and an external business
or organization. In this type of partnership, the coworking space owner collaborates with other businesses to provide
added value, benefits, and services to the members of the coworking community.
Limited partnership
A limited partnership (LP) is a form of business structure that consists of two types of partners: general partners and
limited partners. This structure combines elements of a general partnership with features of a corporation, providing
some liability protection for certain partners. Here are key characteristics and features of a limited partnership
Virtual office
A virtual office is a business solution that provides a range of services to help businesses establish a professional
presence without the need for a physical office space. Virtual offices are particularly useful for businesses that
operate remotely, have a distributed team, or need a local presence in multiple locations. Here are some key aspects
of virtual offices

Private office
A private office refers to an individual, enclosed workspace within a larger office building or business premises.
Private offices are distinct from open office layouts, co-working spaces, or shared workspaces in that they provide a
dedicated and secluded area for a single person or a small team. Here are some key characteristics and
considerations related to private offices
PARTNERSHIP
General partnership
In a general partnership, the liability of each partner is unlimited. It means that the firm's creditors can realise their
dues in full from any of the partners by attaching their personal property if the firm's assets are found to be inadequate
to pay off its debts.• An exception is made in the case of a minor partner whose liability is limited to the amount of his
share in the capital and profits of the firm. In India all partnership firms are general partnerships.
Active or working partner
• Such a partner contributes capital and also takes active part in the management of the firm. He bears an
unlimited liability for the firm's debts. He is known to outsiders. He shares profits of the firm. He is a full-
fledged partner.
Sleeping or dormant partner
• A sleeping or inactive partner simply contributes capitalHe does not take active part in the management of the
firm. He shares in the profits or losses of the firm. His liability for the firm's debts is unlimited. He is not known
to the outside world.
Secret partner
• This type of partner contributes capital and takes active part in the management of the firm's business. He
shares in the profits and losses of firm and his liability is unlimited. However, his connection with the firm is not
known to the outside world.
Limited partner
The liability of such a partner is limited to the extent of his share in the capital and profits of the firm. He is not
entitled to take active part in the management of the firm's business. The firm is not dissolved in the event of his
death, lunacy or bankruptcy.
 Minor as a partner
A minor is a person who has not completed 18 years of ageA minor cannot become a partner because he is not
qualified to enter into a contractBut he may be admitted to the benefits of partnership with the mutual consent of
all the partners.On being so admitted, a minor becomes entitled to a share in the profits of the firmHe can inspect
and copy the books of account of the firm but he cannot take active part in the firm's management.

Rights of partners
1.Every partner has a right to take part in the conduct and management of the firm's business.
2.Every partner has a right to be consulted and express his opinion on any matter related to the firmIn
case of difference of opinion, the decision has ordinarily to be taken by a majorityBut vital issues like
admission of a new partner, change in the firm's businessalteration of profit-sharing ratio, etc., must be
decided by unanimous consent of all the partners.
3.Every partner has a right to have access to, inspect and copy any books of accounts and records of the
firm.
4.Every partner has the right to an equal share in the profits of the firm, unless otherwise agreed by the
partners.
5.Every partner has the right to receive interest on loans and advances made by him to the firmThe rate of
interest should be6 per cent unless otherwise agreed by the partners
6.Every partner has the right to be indemnified for the expenses incurred and losses sus- tained by him in
the ordinary conduct of the firm's business.
7.Every partner has a right to continue in the firm unless expelled in accordance with the terms of the
partnership agreement.
8.Every partner has a right to retire in accordance with the terms of the partnership agree- ment or with
the consent of other partners.
SALARIED APPOINTMENTS
A salaried appointment refers to an employment arrangement where an individual receives a fixed salary as compensation for
their work, typically on a regular basis (such as monthly or bi-monthly). Salaried appointments are common in various sectors,
including the public sector, private sector, and nonprofit organizations.

Private Sector:

Fixed Salary:
Salaried employees in the private sector receive a fixed salary, regardless of the number of hours worked. This provides a
level of financial stability and predictability.
Exempt Status:
Many salaried positions in the private sector are classified as "exempt" from overtime pay regulations. This means that
employees are not eligible for overtime pay, as their salary is considered sufficient compensation for all hours worked.
Benefits and Perks:
Salaried employees often receive benefits such as health insurance, retirement plans, and other perks as part of their
overall compensation package.
Professional and Managerial Roles:
Salaried appointments are common for professional, managerial, and executive roles in the private sector.
Public Sector:

Government Employment:
In the public sector, salaried appointments are common for government employees, including those working at various
levels of government (federal, state, and local).
Civil Service Positions:
Civil service positions in the public sector are often salaried appointments. These roles may include administrative,
professional, technical, and managerial positions.
Fixed Pay Scale:

Public sector organizations may have fixed pay scales or salary bands that determine the
compensation for various positions based on factors such as experience, education, and job
responsibilities.

Job Security:

Public sector jobs often come with a higher degree of job security compared to some private sector
positions.

Overtime Eligibility:

Overtime eligibility for salaried employees in the public sector may be subject to specific
regulations and policies. Some positions may be eligible for overtime pay, while others are exempt.
 WHY IS OFFICE ACCOUNTING IMPORTANT?
FINANCIAL DECISION MAKING
Accurate accounting information helps managers make informed financial decisions for the business.

LEGAL COMPLIANCE
Proper accounting practices ensure compliance with financial regulations and taxation requirements.

FINANCIAL STABILITY
Effectively managing finances through accounting helps maintain the
stability and sustainability of the office.

COMMON TOOLS USED IN OFFICE ACCOUNTING

CALCULATORS
Electronic calculators aid in accurate computations and calculations.
SPREADSHEET SOFTWARE
Software like Microsoft Excel simplifies data entry, organization, and
analysis.
ACCOUNTING SOFTWARE
Specialized software automates accounting
processes and generates financial reports.
 WHAT IS INCOME TAX ?
It is a form of taxation that individuals, Body of Individuals (BOI), Association of Persons (AOP),
Hindu Undivided Family (HUF), and businesses need to pay to the central government. The government
levies the tax on your income during a financial year and uses the money for the country’s development.
The tax amount depends on your income and the tax slabs.

INCOME TAX SLABS

The income tax slab is a block under which the government groups people’s income. The amount of
payable tax depends on your income during a financial year. There are currently two categories of tax
slabs—the old regime and the new regime. The below table details the tax slabs for people below the
age of 60 under the old regime.

Moreover, since Budget 2020, you may choose to

pay taxes under a new regime. Although the tax
rates under the new regime are lower, you can
enjoy the advantage only if you do not use the tax
exemptions and deductions.
 The table details the tax slabs for people below the age of 60 under the old regime.

INCOME TAX EXEMPTIONS AND DEDUCTIONS

These tax benefits lower your taxable income, which leads to reduced tax. However, these are available
only if you choose to pay taxes as per the old income tax slabs in India.

EXEMPTIONS
Exemptions are available for salaried individuals. If you check the salary slip closely, it has some
components like basic pay, travel allowance, House Rent Allowance(HRA), and others. Some of these
incomes are exempted from taxation. For example, you receive HRA from the employer if you are
currently living in a rented house. Even though it is a source of income, there is no need to pay any tax
on it.
DEDUCTIONS
Deductions are calculated on your total income during a financial year. It includes all your investments
and salary. To begin with, salaried people get a standard deduction of ₹50,000 on their salary.
Furthermore, the Income Tax Act, 1961 has various sections under which the government allows other
deductions. Some examples are as follows:

•Section 80D: It allows a yearly tax deduction of up to ₹25,000 on the premium paid towards health
insurance policies. If you buy the Mediclaim for your parents, you will get an additional deduction of up
to ₹25,000.

•Section 80E: It allows a tax deduction on the interest paid for the repayment of an educational loan.

•Section 80G: It allows a tax deduction on the amount paid as a donation to specific charitable
organizations and relief funds.

•Section 80EE: It allows a yearly tax deduction of up to ₹50,000 on the interest paid for the repayment of
a home loan.

ITR FORM
It is a form that you need to fill to submit the taxes. Here, you are required to provide information
related to your income and applicable taxes to file income tax.
 WHAT IS GST?
GST is known as the Goods and Services Tax. It is an indirect tax which has replaced many indirect taxes
in India such as the excise duty, VAT, services tax, etc. The Goods and Service Tax Act was passed in the
Parliament on 29th March 2017 and came into effect on 1st July 2017.
In other words,Goods and Service Tax (GST) is levied on the supply of goods and services. Goods and
Services Tax Law in India is a comprehensive, multi-stage, destination-based tax that is levied on
every value addition. GST is a single domestic indirect tax law for the entire country.

MULTI STAGES
An item goes through multiple change-of-hands along its supply chain: Starting from manufacture until
the final sale to the consumer.

Let us consider the following stages:

•Purchase of raw materials

•Production or manufacture
•Warehousing of finished goods
•Selling to wholesalers
•Sale of the product to the retailers
•Selling to the end consumers
BASIC UNDERSTANDING OF OFFICE ACCOUNTING
Office accounting refers to the financial processes and procedures used to track
income, expenses, and other financial transactions in a professional office
setting like an architecture firm.
Essential for architects to comprehend the financial aspects of managing their
architectural practices. This module may cover the following key principles and
practices:

Accounting Basics
One of the basic principles of accounting is that the purpose of the
bookkeeping system is to keep track of and record an organization’s financial
activity. The aim is not to tell the story of the organization’s activities but to
make the actions understandable and valuable to its owners.
Financial Statements
Architects need to produce legally required financial statements, such as the
income statement, comprehensive income statement, balance sheet, statement
of cash flows, and statement of stockholders' equity.
Bookkeeping
Bookkeeping is the classifying, recording, and reconciling of financial
transactions.
The Chart of Accounts (COA) lists the names and codes of each account and is
used as a guide to keep those transactions organized. Accounts are then
prepared into financial statements or reports that help tell your firm’s financial
story.
The big 3 financial statements are the Balance Sheet, Income Statement, and
Statement of Cash Flows.
The Balance Sheet gives you a snapshot of what you own (assets), who you owe
(liabilities) and what’s left over (equities) for a specific point in time.
The Income Statement displays your revenues, costs, expenses, and profit for a
specific period of time.
And the Statement of Cash Flows gives you an autopsy of cash going in and out
of your business, also for a specified period of time. Check these at least once a
month.
Project Accounting
Any business needs accounting, and architecture companies are no different.
Accurate financial reporting is essential in project management, financial analysis,
and future expansion. The following are some positive aspects of accounting:
Financial management: Specialists may make better judgments and maintain
better financial management in architecture by using accounting to have a
thorough insight into the project’s economic performance. It helps them avoid
overpaying and increases profitability.
Budgeting: Project accounting helps architects create precise budgets by giving
them knowledge of previous project costs, resource needs, and expected costs.
Project management: Architects may handle all project-related tasks, such as
task tracking, invoicing, and time management, on a single platform using project
accounting.
Here is an explanation of a typical Chart of Accounts (COA) that would be used in an architect's office for
basic accounting purposes:
Assets
- Cash and Cash Equivalents - Cash balances of checking/savings accounts
- Accounts Receivable - Outstanding amounts owed by clients for services
- Work in Progress - Billings to date on incomplete jobs
- Prepaid Expenses - Advances for rent, insurance, subscriptions, etc.
Liabilities
- Accounts Payable - Amounts owed to suppliers and vendors
- Credit Cards Payable - Balance owed on company credit cards
- Accrued Expenses Payable - Accrued amounts owed for payroll, taxes, etc.
- Deferred Revenue - Advance payments received from clients
Equity
- Common Stock - Owners' equity accounts
- Retained Earnings
Revenue
- Design Fees - Fees earned for design services
- Construction Admin Fees - Fees for construction phase services
- Expense Reimbursements - Reimbursable expenses billed to clients
Operating Expenses
- Payroll Expenses - Salaries, benefits, bonuses, payroll taxes
- Rent
- Utilities
- Office Supplies & Expenses
- Professional Services - Consultants, legal, accounting
- Depreciation