Partnership Firm Registration
A Partnership is a business structure in which two or more individuals manage and operate a business in accordance with the terms and goals set out in the Partnership Deed.
Partnership registration is relatively easy and is prevalent among small and medium sized businesses in the unorganized sectors.
For Partnership Registration, you must agree on a firm name and then establish a partnership deed.
It is a document stating respective rights and obligations of the partners and to be valid it should be written and not oral.
The terms of the Partnership Deed can be varied to suit the interests of the partners and can even be made contrary to the Indian Partnership Act, 1932 but if the Partnership Deed is silent on any point, then the provisions of the Act would apply.
What is Partnership?
Partnership in the Corporate world refers to a relationship when two or more people decide to share the profits of a business carried on by them all or any of them acting for all.It’s generally done in legal terms. The percentage of ownership varies and depends on certain factors. Partnership firm thus is a firm which allows joint ownership of a business. There are certain rules and regulations that have to be followed while setting up a Partnership firm. Registering a partnership firm is not compulsory under the Indian Partnership Act, 1932 but only Maharashtra has made their registration compulsory. Further a partnership firm can be registered at any point of time i.e. even several years after formation. Registering or not registering a partnership firm has itsown advantages, but like a coin which has two faces, it definitely has its own disadvantages too. Described below in detail is how a partnership firm works and how can you register for partnership firm in India.
The partnership is relatively easy to start however, there are certain conditions and restrictions to be followed in setting them up. Also, according to Indian Partnership Act,1932, consent of all the partners in a partnership firm is required in fundamental matters (like admission of new partners, dissolution of the firm, conversion of the firm etc.) and a majority in other matters and there should be sharing of all the profits or losses made in the business. It also states that there has to be a legal contract that There are certainly more rules while setting up a Partnership firm, clearly stated in the Indian Partnership act,1932 and they should be followed strictly to avoid any severe actions made by authorities towards your firm.
Why Partnership Registration ?
Relatively Inexpensive
Minimal Compliances
Easy to establish
Audit not required
Steps For Partnership Registration ?
Documents Required For Partnership Registration
The following documents are required for the registration of a Partnership firm:
Statement in Form 1 with the prescribed fees
Notarised True copy of the Partnership Deed stating the following :
- The firm-name
- The nature of business of the firm
- The place or principal place of business of the firm
- The names of any other places where the firm carries on business
- The date when each partner joined the firm
- The names in full and permanent addresses of the partners
- The duration of the firm
Proof of ownership or rent/lease of the location of your business.(e.g. Electricity Bill/ Water Bill or Rent/Lease/Leave and Licence Agreement of Business Place)
Copy of PAN Card of partners
Copy of Aadhaar Card/ Voter identity card
Frequently Asked Questions
It takes around 10-14 working days to register a partnership.
A partnership could be registered by registering a partnership agreement or deed where all the terms and conditions would be incorporated.
Yes, your registration can be cancelled. You’ll have to dissolute the firm for cancellation of partnership registration.
As per the Partnership Act, 1932, it is required to submit a copy of PAN card of all partners and address proof of office for partnership registration.
Note: You can use your residential address as address proof of office.
Basically there are two types of partnership deeds – one is registered and the other one is not registered. Registered partnership is incorporated from the office of registrar where no notarisation is required. In case of unregistered partnership, notary is mandatory.