Partnership Firm Registration
A Partnership is one of the most important forms of a business organisation, where two or more people come together to form a business and divide the profits thereof in an agreed ratio. A Partnership is easy to form, and the compliance is minimal as compared to companies.
Running a firm where multiple partners decide the terms of business operation has many legal and compliance angles. Such matters are best left to experts! Choose this plan to avail end to end services right from registering as a partnership firm to preparation of documents involved.
Running your Business as Joint Owners ? Register as a Partnership Firm with TAXAJ
It usually takes 15 to 20 working days.
- PAN Application
- Partnership Deed Drafting
- Filing of deed and other documents with the Registrar of Firms
- Issue of Registration Certificate
- Affidavit filing with the registrar
- A group of at least 2 people having a business idea
- Small businesses looking to using pool of resources contributed by multiple people
- Any existing unregistered Partnership Firm
- Purchase of Plan
- Session with TAXAJ Expert
- Upload Documents on Vault
- Partnership Deed Drafting
- Filing of application with Registrar
- Receipt of Registration Certificate
Name, Contact Number and Email Id of all the Stakeholders.
Self Attested PAN, Aadhar & Passport size photo of all the Stakeholders.
Specimen Signatures of all Stakeholders.
Latest Electricity Bill/Landline Bill of Registered Office.
NOC from owner of registered office. (If Owned)
Rent Agreement from Landlord. (If Rented/Leased)
Brief description of main business activities of the proposed Company.
Shareholding pattern (50:50 or 60:40) between the Stakeholders.
Capital Contribution of the Company.
Name given to the Partnership firm
Any name can be given to a partnership firm as long as you fulfil the below-mentioned conditions:
» The name shouldn’t be too similar or identical to an existing firm doing the same business,
» The name shouldn’t contain words like emperor, crown, empress, empire or any other words which show sanction or approval of the government.
Q. Following details are required in a partnership deed:
A. General Details:
1. Name and address of the firm and all the partners
2. Nature of business
3. Date of starting of business
4. Capital to be contributed by each partner
5. Capital to be contributed by each partner
6. Profit/loss sharing ratio among the partners
B. Specific Details:
Apart from these, certain specific clauses may also be mentioned to avoid any conflict at a later stage:
1. Interest on capital invested, drawings by partners or any loans provided by partners to firm
2. Salaries, commissions or any other amount to be payable to partners
3. Rights of each partner, including additional rights to be enjoyed by the active partners
4. Duties and obligations of all partners
5. Adjustments or processes to be followed on account of retirement or death of a partner or dissolution of firm.
6. Other clauses as partners may decide by mutual discussion
Q. How should be the agreement between partners formed?
Partnership deed is an agreement between the partners in which rights, duties, profits shares and other obligations of each partner is mentioned. Partnership deed can be written or oral, although it is always advisable to write a partnership deed to avoid any conflicts in the future.
Q. Is it necessary to register a partnership firm?
Indian Partnership Act, 1932 governs the partnerships. Registration of partnership firm is optional and at the discretion of the partners. Registration of partnership firm may be done at any time – before starting a business or anytime during the continuation of partnership. It is always advisable to register the firm since a registered firms enjoy special rights which aren’t available to the unregistered firms.
Q. How to register the partnership firm?
An application form along with fees is to be submitted to Registrar of Firms of the State in which firm is situated. The application has to be signed by all partners or their agents.
Q. What are the Documents to be submitted to Registrar?
→ Application for registration of partnership (Form 1)
→ Specimen of Affidavit
→ Certified original copy of Partnership Deed
→ Proof of principal place of business (ownership documents or rental/lease agreement)
If the registrar is satisfied with the documents, he will register the firm in Register of Firms and issue Certificate of Registration. Register of Firms contains up-to-date information on all firms and can be viewed by anybody upon payment of certain fees.
- What is a Partnership Firm?
A Partnership is where two (or more) people join hands to carry out a business for profit. The partners become joint business owners and carry out operations governed by the partnership deed. The regulations are least and it makes it a desirable option for businesses having joint owners. However, in a partnership firm the partners are jointly and individually liable for debts of the firm. This form of structure is ideal if there are no/less requirement of external funds and low risk of bad-debts for example consultancy firms.
- Why should Partnership Firm go for registration?
Partnership firms are governed by the Indian Partnership Act, 1932. Under the act, registration is not mandatory but it is advisable due to following reasons:
- Partner(s) can’t file a case in any court against the firm/ other partners unless firm is registered.
- The unregistered firm or its partners can’t file a case against third party on breach of a contract but the third party can file a case
- In case of a dispute with a third party, the unregistered firm or any of its partners cannot claim a set off
- When should we apply for registration of our partnership firm ?
A partnership firm can be registered whether at the time of its formation or even subsequently. The application for registration is to be made to the registrar of firms of the region in which the business is situated. It is advisable to get the firm registered as soon as it starts its business to avail the rights that can be enjoyed only by a registered firm.
- Is there any guideline on choosing name for the firm?
The name of a partnership firm should not contain any words which indicate the approval/support of the government other than a case where the government has given its written consent for the use of such words as part of the firm’s name. Key pointers:
- The names must not be too identical or similar to the name of another existing firm doing similar business.
- The name must not contain words like Crown, Emperor, Empress, Empire or any other word indicating government approval.
- What will be the government fee for firm registration?
The government fees applicable varies from state to state based on partner contribution. In most states the fee falls in range of Rs.2000-3500 along with stamp duty. Our experts will guide you on this. You will be charged only on actual government fees.
- How much time does it take to register a partnership?The registration of Partnership Firm in India can take up to 12 to 14 working days. However, the time taken to issue a certificate of incorporation may vary as per the regulations of the concerned state. The registration of Partnership Firm is subject to Government processing time which varies for each State.
- Are there any grounds on which my partnership can be invalid?Often, if the partnership agreement is not registered, the court may deem a partnership invalid. If the object of the business is illegal, the court may consider the partnership invalid and dissolve the partnership.
- If all partners wish to end the partnership, how can they do so?If the partners of a firm wish to end the partnership, they can do so by dissolving the partnership by notice, if it is a partnership of will. A partnership can be dissolved in accordance with the terms laid out in the Partnership Deed, or they can do so creating a separate agreement.
- Can my certificate of registration be cancelled?In a certain sense, a partnership certification of incorporation can be revoked, this often termed as dissolution. A dissolution can be brought upon automatically when all partners or all partners except one partner are declared insolvent or if the firm is carrying unlawful activities, i.e. like trading in drugs or other illegal products, corporate malpractice or making business engagements with countries that may harm the interest of India.
- What is the scope of liability when it comes to partnerships?Every partner is jointly liable with all the other partners and also individually, for all acts/activities of the firm, during the course of business while he/she is a partner. This means that if a loss or injury is caused to any third party or a penalty is levied during the course of business all partners will be held liable even if the injury or loss was caused by one of the partners.