Partnership Registration
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Partnership Registration is easy and simplified when done by RPG Legal. Register your partnership firm sitting at home. Our dedicated team will assist you to register your Partnership firm across India. We extend our support from documentation to preparation and filing.
Partnership Registration in India
Partnership firms are ideal for a medium and micro business in the unorganised sector. A partnership firm is very easy to form, and a minimum of two people are required to build a Partnership Firm. In a Partnership firm, there are very minimal compliances in comparison to other business entities. We can say that partnership creates a relationship between two or more people who have agreed to carry on a law full business for profit.
To start a Partnership firm partners need to enter into an agreement which is popularly known as Partnership Deed, and it can further be notarised. A partnership deed is a document stating particular rights and obligations of the partners, and to be valid, it should be in written not oral. The terms of the Partnership Deed can be modified to suit the interests of the partners and can even be made contrary to the Indian Partnership Act, 1932. If the Partnership Deed is silent on any point, then the provisions of the Act would apply.
Advantages of Partnership Firm
- Relatively Inexpensive
Compared to other forms of business, Partnership Firm is less expensive. No minimum capital is prescribed and it can be based on business requirements. Registration of the firm is also not mandatory and can be formed without any legal formality. Thus Partnership Firm is simple and economical to form and operate.
- Fewer Compliance
As the partnership firm have its separate PAN number and need to file only ITR. However, GST & TDS returns need to be file monthly or quarterly based on the transaction and turnover. Partnership firms have the advantage of minimal compliance in comparison to LLP or Private limited company.
- Flexibility
Partnership business is more flexible than sole proprietorship concern because the Business can be easily financed for growth and expansion. On the other hand, partners may go out or come into Business, but the partnership business is not affected and suitable changes can be easily introduced whenever necessary.
- No Audit Required
Partnership firms are not required to audit the books of accounts under the Partnership Act 1932. Usually, the calculation of the amount of income tax payable by firm is carried out based on self-assessment by the firm. However, Audit is required in case turnover crosses the threshold limit.
- Sharing of Risk
Partners share the cost of the firm’s set up. They share work and responsibilities. They share business expenses and risks. The corresponding skills and additional contacts of each partner can lead to the achievement of more significant financial results together.
- Can Easily Dissolved
A partnership firm can be dissolved easily at any time. Closure of the Partnership firm is simple and may not involve too many complexities. Solely by agreement of all partners, it can be dissolved. The partnership business can come to closure if any partner demands it.
Documents Required to Register Partnership Firm
Documents of Partners
- Two Colour Photograph
- Copy of Pan Card
- Valid Identity Proof
- Latest Address Proof
Documents of Premises
- Rent Agreement or
- Lease deed, sale deed, Property Tax Receipt
- Utility Bill in name of the owner to the establishment
- NOC from the Owner of the establishment
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FREQUENTLY ASKED QUESTIONS
Two or more persons are required to start a Partnership firm. A maximum number of 20 Partners are allowed in a one Partnership firm.
The partner must be an Indian citizen and Resident. Moreover, NRI and Persons of Indian Origin can also become a partner in the Indian partnership firm, and he further can contribute to the capital of the Firm which subject to certain conditions and with prior approval of the Government of India.
For starting a partnership firm, there is no limit on the minimum capital. Therefore, a firm can be started with any amount of capital and can be based on the requirement of the business.
Partnership firm does not have a separate legal entity and partners of a partnership firm have unlimited liability and are personally liable for the losses and liabilities of the partnership firm. Besides, LLP has a separate legal entity and is registered under the Limited Liability Partnership Act, 2008. The partners of an LLP are called Designated partners and have liability limited to the capital invested by them and are not personally liable for the liabilities of the business.
The answer is No. It is always recommended that partners formed the Firm and then got it registered with the Registrar of Firm. The Registration of a partnership firm is not compulsory under the Indian Partnership Act 1932. However, Registration brings many advantages to the Firm. It is optional for partners to set the Firm registered, and there are no penalties for non-registration.
- Filing of Income Tax Return (ITR) each year.
- Maintaining the books of accounts.
- TDS and GST return filing.
For Registering Firm, Partners can adopt any name and protect that under the trademark to prevent the duplicacy of your registered name.
Yes, conversion of Partnership firm into LLP and Private Limited Company is possible. Conversion requires a procedure that is molecular complex, expensive and time-consuming. Therefore, It is recommended to all entrepreneurs to consider and start an LLP or Company instead of a Partnership Firm.
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. Below is the list of items which should be an element of the agreement.
- The main object and activities of the Firm
- The effective date of the Firm
- The duration of the Partnership Firm
- The clause relating Capital Contribution
- The profit-sharing ratio of the partners
- Management and Administration of Partnership Firm
- How to resolve disputes
- The deed must be signed before two witnesses
- The deed should be notarized
Under the partnership form of business, there is no separation of ownership and control. The partners act in confidence with each other and act of one partner is binding on another. Partners monitor and manage the Firm without any interference. The decision making in case of a firm is relatively a fast process in comparison to that of the Private Limited company, Limited Liability Partnership (LLP)
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