business registration services
Partnership Firm
Registration
Complete your Partnership Firm registration in a single day with our all inclusive package for Partnership Firm Registration. Our services can be availed from any location in India and abroad.
An Overview
Complete your Partnership Firm registration in a single day with our all inclusive package for Partnership Firm Registration. Our services can be availed from any location in India and abroad. Our goal is to help entrepreneurs set up their partnership firm in India through a quick and hassle-free process. A partnership firm is a business entity regulated by the Partnership Act, 1932. A firm is constituted when a group of investors get together and mutually agree on terms related to capital sharing, profit sharing, sharing of liabilities, rights and obligations of partners, interests of partners in the firm, and the manner in which partners shall be admitted and expelled out of the firm. The existence of the firm is based on the existence of the deed.
Key decisions to be taken while setting up a Partnership Firm
- How many partners shall collectively own the firm?
- What amount shall each partner contribute?
- How will profits and liabilities be shared among them?
- How many partners shall be actively involved in the management of the business?
- Whether partnership firm will be registered or not?
- What will be the proposed business activity of the firm?
- What will be the name of the firm?
- What will be the authorised capital of the firm?
Checklist for Partnership Firm Registration
Although Partnership Firm Registration is optional in India, there are certain prerequisites that must be fulfilled, before registering the firm, as mandated by the Partnership Act, 1932. These requirements deal with the number of partners, designated partners, name, address, and capital of the firm. A list of such prerequisites for partnership firm registration has been mentioned below.
- Minimum 2 Partners
- Maximum 20 Partners
- A registered address of the firm
- New, unique and valid name
- Some amount of capital
Process of Partnership Firm Registration
Partnership Firm registration in India is optional under the Partnership Act, 1932. However, to avail the benefits of a number of government schemes and initiatives, it is highly recommended that firms do get registered with the appropriate authority in the manner prescribed under law. We have elaborated the stepwise process of partnership firm registration below
- Documentation
- Consideration of Name of the Firm
- Drafting of Partnership Deed
- GST Registration of Partnership Firm
- Registration of Partnership Firm with ROF
Partnership Firm Registration
Frequently Asked Questions
A partnership firm is formed when an association of people get together and decide to share the ownership of the business, its profits, its losses, its assets, its liabilities, and its capital contribution in a mutually agreed ratio, mentioned in the partnership agreement. The firm is constituted on the basis of a stamped and notarised Partnership agreement signed by all its partners. The firm formed as a result has an identity separate from its partners. As a result, it can be statutorily registered under the Partnership Act. The liability of each partner of a firm is unlimited, which means that if need arises, each partner shall have to pay off the liabilities of the business from their personal pockets. To learn more about the distinct features of a firm, check out our detailed comparison table here.
For Partnership Firm Registration, you require a minimum of two partners, a registered business address, a unique and valid name, and some amount of capital infused for the smooth functioning of the business. You shall also require a partnership deed signed by all partners in the presence of a notary and two other witnesses. The deed must be drafted on a stamp paper and stamped by the notary. Note that the firm cannot have more than 20 partners.
The partnership business is regulated under the Indian Partnership Act, 1932, which prescribes the possibility of two types of the firm, an unregistered firm, and a registered firm. An unregistered firm is formed by constituting a partnership agreement, signed by all partners in the presence of 2 witnesses and a notary. Such firms do not get registered with the Registrar of Firms. On the other hand, firms which get registered with the Registrar of Firms by submitting the prescribed application form along with the appropriate supporting documents, are known as a Registered Partnership Firm.
Though the Indian Partnership Act, 1932 makes partnership firm registration optional, section 69 of the act mentions certain disadvantages that an unregistered firm carries. A list of such disadvantages have been mentioned below.
The application for partnership firm registration is filed with the Registrar of Firms, which is an authority under the State Government. Every state in India has a separate Office of ROF, the jurisdiction of which extends to the territorial boundaries of the concerned state. Applications for partnership firm registration must be filed to the ROF of the state in which it has been established. The Registrar usually takes 1-2 weeks to issue the Certificate of Partnership Firm Registration, from the date of submission of the application
The law does not provide any specific format for the partnership deed, it is up to the partners what they agree and reduces in writing at the time of starting their partnership firm. The partnership once entered can be changed any number of times. However, each amendment of the deed must be filed with the registrar for Partnership Firm registration. Below is the list of items which should form part of the agreement.
The stamp duty on partnership deeds varies from state to state and depends on the authorized capital of the firm. The notary of the deed is an essential requirement for partnership firm registration in India.
The applications for obtaining PAN and TAN are filed to the Income tax Department in Forms 49A and 49B respectively. Usually, it takes around 6-10 days from the date of filing of application, for the IT department to allot PAN and TAN to the firm.
Yes, a partnership firm can be converted easily into a Limited Liability Partnership or a Private Limited Company, the manner for which has been prescribed in the Partnership Act 1932.
A partnership firm is formed with the constitution of a Partnership deed signed by all its partners. As its registration is optional, a firm can be set up on the very day the deed is signed by the partners. The notarization of the agreement may be taken up at a later stage, if required. Similarly, the partnership firm registration with the ROF can also be undertaken when its need arises. This flexibility makes partnership firm registration easier, simpler, and quicker than setting up other forms of businesses like an LLP or a company.
The name of the partnership firm is decided before it is set up. Not only should it be unique and communicative of the brand and business activity of the firm, but must also be legally valid, according to the concerned laws. A proposed name is considered to be legally valid if it is neither identical to the name of an existing business, nor similar to an applied or registered trademark. The name must also be mentioned in the partnership deed signed by all partners of the firm. You can consult our team of legal experts for checking the availability and eligibility of the names proposed for your firm, without paying any consultation fee.
Unlike a Limited Company or LLP, there is no need to file the annual returns of a partnership firm.
Filing Income Tax Returns is mandatory for a partnership firm at the end of every financial year. The ITR must be filed on or before the prescribed due date. There is no mandatory requirement of tax audit for a partnership firm. However, if the turnover of the firm crosses Rs.2 crores, tax audit becomes mandatory.
Since there is no separation between the ownership and management in a partnership firm, the partners themselves are responsible for controlling the management and administration of the firm.
The existence of a partnership firm depends on the constitution of the partnership deed. Hence, when any partner who has signed the partnership deed dies or departs from the firm, the deed becomes null and void. The nullification of the deed results in the dissolution of the firm. If the remaining partners wish to continue their business together, they must first constitute a new deed, based on which a new firm shall be formed. Only after the formation of a new firm can they continue with their business together.