TAXAJ

Partnership Firm Registration (Registered with ROF)

Partnership firm registration can be obtained for any association of people who join together for a business purpose and to share the profits. In Delhi, all partnership firms are regulated by the Indian Partnership Act, 1932, and as per these provisions, a partnership firm must be registered. In this article, we view the procedure for Delhi partnership firm registration in detail.

Page 1Created with Sketch.

About This Plan

Running your Business as Joint Owners ? Register as a Partnership Firm with TAXAJ

Created by potrace 1.15, written by Peter Selinger 2001-2017

Timeline

It usually takes 15 to 20 working days.

Buy Now @ INR 10,000/-
Services Covered
Who Should Buy
How It's Done
Documents Required
Services Covered

  • 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
Who Should Buy
  • 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
How It's Done

    • Purchase of Plan
    • Session with TAXAJ Expert
    • Upload Documents on Vault
    • Partnership Deed Drafting
    • Filing of application with Registrar
    • Receipt of Registration Certificate
Documents Required
  • Form No.1 duly filled and affixed Rs.3 court fee stamp.
  • A photocopy of Partnership deed on minimum stamp paper or Rs.200.
  • Ownership Proof of Principal Place (any one of the following)
  • Registered document of the property
  • House tax receipt.
  • Water bill.
  • Electricity bill in the name of the property owner.
  • Affidavit/NOC on Rs.10 and Rs.5 Notary stamp.
  • Rent agreement (If rented property).
  • Residential proof of all the partners (any one of the following)
  • Voter card.
  • Passport.
  • Driving Licence.
  • Affidavit/NOC on Rs.10 and Rs.5 Notary stamp and ownership proof of other places (if mentioned in Form no.1).

Note: For all the above documents requires an attestation from the Advocate Notary or C.A. with the Registration number

What is a Registered Partnership Firm?

Partnership is defined as association of two or more persons who have come together for Business purpose and agreed to share profit (loss) arising out of the said Business, carried on by all or any of the Partners.

Partnership Firms in India are established and Governed by the provisions of Indian Partnership Act, 1932  (referred as “Act”). The establishment procedure of Partnership Firm under Indian Partnership Act, 1932 leaves the Partnership Deed Registration with Registrar of Firm (RoF) at the will of the Partners in the Firm.

The partners of the firms may Register Partnership Firm Online considering the benefits of Registration. Let us first know how the Partnership Firm registration in India will be beneficial compared to unregistered Partnership Firm.

Benefits of Registration of Partnership Firm (ROF Registration)

It is a well-known fact that it is not compulsory to register Partnership Firm. However, it is highly advisable to get ROF registration as a Registered Partnership Firm enjoys certain benefits that an Unregistered Partnership Firm does not have access to. Following are a few benefits of the ROF Registration.

  • During the course of business if any dispute arises with any third party or any other matter arises that needs any legal proceeding, then the Registered Partnership can go in to the court of law for the resolution of such dispute.
  • When the Partnership Firm is registered and have valid ROF Registration certificate, then the partners can go to the court of law for resolving any issue or dispute arose between the partners.
  • The Registration of Partnership Firm enables all the partners with a special power to claim set-off when any third party files suit against the Partnership Firm.
  • As compared to unregistered partnerships, the Registered Partnership Firm that has completed an online Process of ROF Registration (Registration of Partnership Firm) enjoys benefit of having higher credibility.
  • During the course of business, if a Partnership Firm wishes to convert in to any other form of business structure i.e. conversion from Partnership to LLP or Conversion of Partnership to Private Limited Company, then it is necessary for Partnership Firm to have valid ROF Registration.

Non-Registration of Firm

A partnership firm whether registered or unregistered. Unregistered firms and partners undergo the following consequences.

  • A claim for setoff towards an unregistered firm is not permissible.
  • The unregistered firm partner will not able to file for a case in a court by a partner towards the firm or another co-partners.
  • Any case cannot be filed in the court by the firm toward third parties.

Partnership Firm Naming

The name of the partnership firm must not be too similar or identical to the name of any other existing company performing relevant business to regret duplication in the name of firms.

Also, the name must not contain terms like Emperor, Empress, Crown, Empire or the terms indicating the approval of Government, sanction only if the State Government signifies its consent in writing to the acceptance of such words as part of the name of the partnership firm.

Deed of Partnership

A Partnership Deed is a record in which the terms and conditions of the members of a partnership are included. The Partnership deed consists of the following components as below:

  • Both Firm and Partners address as well as name.
  • Nature of Business of the Firm.
  • Commencement date of business or firm.
  • The duration of Partners (whether for a project/ fixed period).
  • Profit distribution ratio among the partners.
  • Capital contribution from each partner.


The components specified above are the essentials that are needed in all partnership deeds. If required, the partners may also cover any further clauses. Some of the additional provisions which can be involved in the deed of the partnership are listed here:

  • Interest on Partners’ Loan, Partner’s Capital and Interest, if any.
  • Commissions, Salaries, etc., if any, chargeable for partners in the firm.
  • The process of making accounts and audit arrangement.
  • Division of responsibility and task, i.e. the powers, duties, and commitments by all the partners in the firm.
  • Rules and Regulations in case of retirement, death and admission of a partner.

Partnership Firm Registration Procedure

A Partnership Firm is registered under local Registrar of Firm (RoF) hence the procedure of registration may differ from State to State. Hereby, we are discussing a general procedure to be followed to register Partnership Firm online.

  1. Drafting of Partnership Deed:

A Partnership Deed shall first be drafted considering the provisions prescribed under the Indian Partnership Act, 1932. Any clauses as required for the Business of the proposed Partnership Firm can be incorporated in the Partnership Deed. However, the clauses to be incorporated shall be in harmony with the provisions of Partnership Act.

  1. Execution of Partnership Deed:

Once the draft of Partnership Deed prepared in consultation with professionals is confirmed as per the requirement, the deed shall be duly executed by payment of stamp duty as applicable for the concerned State and notarisation of same. The Partnership Deed shall be duly signed by all the partners of the firm at the place specified along with the initials on all rest pages. Further, the witnesses of the Partners shall also provide the signature along with their residential address.

  1. Payment of Stamp Duty and Notarisation:

The execution of the Partnership Deed shall be done after the payment of stamp duty as prescribed under State Stamp Act where the Business Place of the Partnership Firm is situated. The Deed can be executed either on non-judicial stamp paper or by way of franking. Franking is payment of stamp duty through banking channels and is equivalent to stamp paper. After payment of stamp duty, the deed shall be notarised after providing signature of Partners and witnesses as explained in previous point.

  1. Application for PAN:

The application for allotment of Permanent Account Number can be made before or after the Registration of Partnership Firm. The registration procedure of most states provides application to be made before the application to Register Partnership Firm Online or otherwise. The application of PAN Allotment shall be supported by copy of the Partnership Deed.

  1. Registration of Partnership Deed:

The authority concerned to Register Partnership Firm is Registrar of Firms (RoF) within whose jurisdiction the place of business falls. The application for registration of Partnership Firm shall contain the name of the firm, name of the Partners and their addresses, place of Business, duration or time of Business, etc. The registrar may also require submission of documents depending on the procedure as applicable in the said State.

On receipt of the application, the Registrar shall review and grant the Certificate of Registration on his satisfaction. The Registrar shall on registration, provide the Certificate of Registration along with the original Partnership Deed.

  1. Opening of Bank Account:

The requirement of opening of Bank Account arises in order to carry on the commercial activity in name of Partnership Firm. A current account in name of Partnership Firm shall be opened by submitting the documents as required by the KYC policy of your preferred bank.

In order to remove the deficiency of unregistered Partnership Firm, the Partnership Act provides that the said unregistered Partnership Firm can be registered at any time after its establishment make an application for Registration. However, the application for registration cannot be made to claim benefits of registered firm when the third party has already initiated the suit against the Partnership Firm.

    Benefits of Partnership Firm Registration

    1. Ability to file case against Third Parties:

    The partners of the registered Partnership Firm can bring third parties to the court for resolution of disputes arouse during the course of Business or any other matter relating to the Partnership Firm.

    An unregistered Partnership firm loses the right file the case against third party for resolution of their disputes until and unless the procedure of Deed Registration has been completed. However, the third party always own the right to file the suit against a Partnership Firm irrespective of its registration status.

    1. Power to file suit against co-partners:

    As none knows when the dispute between the Partners arises, whether for the sharing of profits or any other matter regarding operations of the Partnership Firm. The resolution of any dispute is best resolved by the Court of Law.

    The Partners of an unregistered Partnership Firm cannot enforce any clauses of Partnership Deed. To enforce the said clauses, the registration for Partnership Firm shall be required by following the procedure prescribed for the same.

    1. Ability to claim Set-off:

    The registration of Partnership Firm enables the partners with power to claim set-off. When any third party files a suit against the Partnership Firm, the Partnership Firm can claim the set-off, if any against the claim of third Party. The said power to claim set-off is not available when the Partnership Firm is not yet registered under the Indian Partnership Act, 1932.

    1. Higher Credibility:

    Compared to an unregistered Partnership Firm, a Partnership Firm which has completed the procedure of Online Registration of Partnership Firm enjoys higher credibility. Although both registered and unregistered Partnership Firms are legal and valid under the given Act, the Registered Firm is highly preferred by authorities over unregistered one.

    1. Conversion of Entity:

    A Partnership Firm as registered with the Registrar of Firm has ease compared to an unregistered firm for conversion. The conversion of the Partnership Firm into any other entity such as Private Company or LLP i.e. in corporate structure can be easily completed.

    An unregistered firm can be registered at any time after its formation and establishment to claim above explained advantages.