2–50 Partners · Partnership Deed · Same Day · No MCA
Partnership Firm Registration Online
Register your partnership firm in India with a legally drafted Partnership Deed, GST Registration, MSME Certificate and Current Account assistance. Governed by the Indian Partnership Act 1932. Fast, affordable, CA-drafted deed.
📝 Same Day Deed✅ GST + MSME Included⚖️ Legally Drafted💰 Starts ₹2,499
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Basic
Partnership deed for simple 2-partner local businesses
₹2,499 excl. GST
⏱ 1–3 working days
CA-Drafted Partnership Deed
Stamp Paper & Notarisation Guidance
PAN Application for Firm
Free Name Availability Check
Most Popular
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Standard
Complete setup for trading, service & professional partnerships
₹4,999 excl. GST
⏱ 7–10 working days
CA-Drafted Partnership Deed (up to 5 partners)
GST Registration (GSTIN)
MSME / Udyam Certificate
PAN Application for Firm
Current Account Opening Assistance
Free CA Consultation (30 min)
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Registered Partnership
Registered with Registrar of Firms — legally enforceable rights
₹7,999 excl. GST
⏱ 15–20 working days
Everything in Standard
Registration with Registrar of Firms (Form 1)
Certificate of Registration
State-Specific Shop & Establishment Licence
TAN Registration (for TDS)
Annual Compliance Checklist + 1 CA Call/year
📋 What Is a Partnership
What is a Partnership Firm in India?
A partnership firm is formed when two or more individuals carry on business together to share profits. Governed by the Indian Partnership Act 1932. No minimum capital, no MCA registration.
✅ Advantages of Partnership Firm
Easy to form — only a Partnership Deed required, no MCA filing
Low cost of setup — no stamp duty on capital (except deed)
Pooled resources — multiple partners contribute capital and skills
Faster decision making — no board resolutions or shareholder votes
Banks offer better credit than proprietorships — higher trust factor
No annual ROC filings — no AOC-4, MGT-7 or MCA compliance
Partners' remuneration & interest deductible u/s 40(b) of IT Act
Flexibility — deed can be amended by mutual consent at any time
⚠️ Limitations of Partnership Firm
Unlimited joint and several liability — personal assets at risk
No separate legal entity — firm and partners are the same in law
Maximum 50 partners only (20 for banking firms)
Cannot raise equity funding — no share capital or ESOP possible
Dissolved on death or insolvency of a partner (unless deed provides otherwise)
Taxed at flat 30% (regardless of profit level — unlike individual slabs)
Unregistered partnership cannot sue in court (only registered can)
Disputes between partners can affect business operations
📄 Partnership Deed
What Must a Partnership Deed Contain?
The Partnership Deed is the backbone of the firm. TAXAJ CA-drafts a comprehensive deed covering all essential and important clauses.
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Mandatory
Firm Name & Business Address
Name of partnership firm and registered/principal place of business. Cannot contain words implying government approval.
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Mandatory
Partner Names, Addresses & Details
Full names, permanent addresses, nationality and Aadhaar/PAN of all partners. At least 2 partners required.
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Mandatory
Date of Commencement
Date from which the partnership begins. Important for tax and liability purposes.
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Mandatory
Nature of Business / Objects
Clear description of the business activities the partnership will undertake. Partners cannot act beyond stated objects.
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Important
Duration of Partnership
Whether the firm is for a fixed term or at will (most common). Partnership-at-will can be dissolved by any partner by giving notice.
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Important
Other Branch Offices
List of other offices or branches where the partnership will operate across India.
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Critical
Capital Contribution
Amount of capital each partner contributes. Can be cash, property, skills or goodwill. Must be stated clearly for 40(b) deduction eligibility.
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Critical
Profit & Loss Sharing Ratio
How profits (and losses) are shared. Can be equal or unequal. Ratio must be stated — otherwise equal sharing assumed by law.
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For Tax Benefit
Partner Remuneration
Salary/remuneration payable to working partners. Deductible u/s 40(b) of IT Act up to prescribed limits: ₹3L or 90% of book profit (first ₹3L) + 60% above that.
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For Tax Benefit
Interest on Capital
Interest payable on partners' capital contributions. Maximum 12% p.a. deductible u/s 40(b). Rate stated in deed is crucial for tax deduction.
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Important
Bank Account Operations
Which partners are authorised to operate the bank account — individually or jointly. Critical for day-to-day banking operations.
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Important
Drawings by Partners
Limit and frequency of drawings each partner can make from the firm. Prevents disputes over cash withdrawals during the year.
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Important
Rights & Duties of Partners
Each partner's rights to participate in management, inspect books, veto decisions and duties to act in good faith for the firm.
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Important
Authority of Partners
Which partners have signing authority for contracts, cheques, loans and legal documents on behalf of the firm.
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Important
Accounts & Audit
How and when financial accounts will be maintained, which financial year, whether to appoint an auditor and when accounts will be finalised.
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Important
Admission of New Partners
Process for admitting new partners — unanimous consent required unless deed specifies majority. Capital contribution and profit sharing of new partner.
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Recommended
Non-Compete & Confidentiality
Partners not to engage in competing business during and after partnership. Protection of trade secrets, client lists and business information.
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Recommended
Intellectual Property
Ownership of IP created by partners during the partnership — trademark, copyright, patents and trade secrets vesting in the firm.
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Important
Retirement of Partner
Notice period for retirement, valuation of retiring partner's share, payment terms for goodwill and capital settlement.
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Critical
Death / Insolvency of Partner
Whether firm continues after death/insolvency of a partner or dissolves. Legal heirs' rights to the deceased partner's share in the firm.
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Important
Expulsion of Partner
Grounds and procedure for expelling a partner for misconduct, breach of duty or prolonged absence. Requires express provision in deed.
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Important
Dispute Resolution
Whether disputes go to arbitration (preferred) or civil court. TAXAJ recommends arbitration clause — faster and cheaper than litigation.
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Important
Dissolution of Firm
Grounds for dissolution, manner of settling accounts and distributing assets on winding up. Priority of payment (liabilities first, then partners).
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Recommended
Valuation Method for Goodwill
Pre-agreed formula for goodwill valuation on retirement, death or dissolution. Avoids disputes — e.g. 2x average profits of last 3 years.
⚙️ Process
How TAXAJ Registers Your Partnership Firm
Deed ready in 1–3 days. Full setup with GST and MSME in 7–10 days. Optional ROC registration in 15–20 days.
1
CA Consultation
Discuss partners, capital, profit ratio, business, remuneration structure via call/WhatsApp.
2
Deed Drafting
CA drafts the Partnership Deed with all agreed clauses. Shared for your review and approval.
3
Stamp & Notarise
Deed printed on non-judicial stamp paper and notarised by all partners. TAXAJ guides stamp value.
4
GST + MSME
GST registration filed with firm name & PAN. MSME/Udyam certificate issued in 1 day.
5
Bank & Certificates
Bank account documentation prepared. All certificates delivered via WhatsApp and email.
📄 Documents Required
Documents Required for Partnership Firm Registration
Required from each partner individually. Soft copies accepted. No physical visit needed.
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PAN Card of Each Partner
Mandatory for all partners. The firm also gets its own PAN. Without all partners' PAN, 40(b) deductions cannot be claimed.
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Aadhaar Card of Each Partner
Required for GST registration — Aadhaar must be linked to active mobile for OTP verification.
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Business Address Proof
Electricity bill / property tax (owned) or rent agreement + NOC + electricity bill (rented premises).
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Bank Account Details
All partners' personal bank passbook or cancelled cheque. Firm's bank account opened after deed.
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Passport Size Photographs
Recent photo of each partner required for GST and state-specific applications.
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Email & Mobile of Each Partner
Separate active email and mobile for each partner — used for OTP and portal registrations.
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Draft Terms (Capital, Ratio, Salary)
Agreed capital contribution of each partner, profit/loss ratio, remuneration (if any) and interest on capital rate.
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Nature of Business
Description of goods sold or services rendered — needed for HSN/SAC selection in GST registration.
📊 Tax & Compliance
Tax Obligations of a Partnership Firm in India
Partnership firms are taxed at a flat 30% plus surcharge and cess. Key deductions under Section 40(b) help reduce the tax burden.
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Income Tax — ITR-5
All partnership firms file ITR-5. Taxed at flat 30% regardless of profit. AMT (18.5%) applies if regular tax falls below. Partners' share of profit is exempt u/s 10(2A).
30% flat + 4% cess
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Section 40(b) — Key Deductions
Remuneration to working partners: deductible up to ₹3 lakh or 90% of book profit (first ₹3L) + 60% above. Interest on capital: deductible up to 12% p.a. Only if mentioned in deed.
Saves significant tax
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GST Filing
GSTR-1 (monthly/quarterly) + GSTR-3B (monthly) if registered. Annual return GSTR-9 if turnover >₹2 crore. Partnership GST filings use firm's GSTIN.
5% / 12% / 18% / 28%
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Advance Tax
If estimated tax >₹10,000 after TDS, advance tax must be paid in 4 instalments. Non-payment attracts 1%/month interest u/s 234B and 234C. Plan with TAXAJ before due dates.
4 instalments/year
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Tax Audit u/s 44AB
Mandatory CA audit if business turnover >₹1 crore (₹10Cr if >95% cashless) or professional receipts >₹50L. Audit report filed by 30 September every year. TAXAJ handles.
If turnover >₹1 Cr
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Partners' Personal Tax
Partners file individual ITR-1/2/3. Their share in firm profit is exempt u/s 10(2A). Remuneration and interest received from firm are taxable in partners' hands at slab rates.
Individual slab rates
⚖️ Entity Comparison
Partnership Firm vs LLP vs Pvt Ltd — Which is Right for You?
Partnership is fastest and cheapest to start with 2+ people. LLP gives limited liability. Pvt Ltd enables funding.
| Feature | 🤝 Partnership | ⚡ LLP | 🏢 Pvt Ltd |
|---|---|---|---|
| Minimum Partners/Directors | 2 | 2 Designated Partners | 2 Directors + 2 Shareholders |
| Maximum Partners/Members | 50 (20 for banking) | Unlimited | 200 |
| Registration Required | Optional (Voluntary) | MCA — LLP Act 2008 | MCA — Companies Act 2013 |
| Liability | Unlimited Joint & Several | Limited to Contribution | Limited to Share Capital |
| Separate Legal Entity | No | Yes | Yes |
| Annual MCA Filings | None (if unregistered) | Form 8 + Form 11 | AOC-4 + MGT-7 + more |
| Tax Rate (Entity) | 30% + cess (ITR-5) | 30% + cess (ITR-5) | 22%–25% (ITR-6) |
| Partners' Share in Profit | Exempt u/s 10(2A) | Exempt u/s 10(2A) | Taxable as dividend |
| Equity Funding (VC/Angel) | Not possible | Rare — very difficult | Yes — equity/ESOP |
| Cost of Setup | ₹2,499 – ₹8,000 | ₹6,000 – ₹15,000 | ₹10,000 – ₹20,000 |
| Time to Form | 1–3 days (deed) | 7–15 days | 7–15 days |
| Best For | 2–5 partners, local business, low compliance | Professionals, service firms, limited liability needed | Startups, funded, Pvt equity, ESOPs |
🏆 Why TAXAJ
Why 50,000+ Businesses Chose TAXAJ
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CA-Drafted Deed
Every deed drafted by a Chartered Accountant with specific 40(b) clauses that maximise tax deductions.
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Same Day Drafting
Share partner details in the morning — draft deed ready by evening for your review.
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Transparent Pricing
All-inclusive pricing. Stamp paper and notary charges guided separately — no hidden costs.
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WhatsApp-First
All documentation, deed sharing, feedback, certificates — managed over WhatsApp for your convenience.
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Pan-India Coverage
State-specific deed and stamp duty guidance for all states — Delhi, Karnataka, Maharashtra, Bihar, UP etc.
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4 Physical Offices
Delhi, Bangalore, Bihar, Goa — walk in for deed signing, notarisation and bank account opening help.
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Section 40(b) Optimised
Deed structured specifically to maximise remuneration and interest deductions — legally correct, tax-efficient.
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Full Lifecycle Support
Annual ITR-5, GST returns, partner changes, deed amendments — same TAXAJ team handles it all.
📚 Complete Guide
Partnership Firm Registration — Complete Guide India
Everything you need to know before registering your partnership firm and drafting your deed.
🤝 Is Registration of Partnership Firm Compulsory in India?
Under the Indian Partnership Act 1932, registration of a partnership firm is voluntary and not compulsory. A partnership firm can operate legally with just a Partnership Deed — even unregistered. However, there is one critical consequence of remaining unregistered: an unregistered firm cannot file a suit in any court to enforce its rights against third parties or against partners (Section 69). Partners of an unregistered firm also cannot file suit against each other to enforce their rights under the partnership deed. This means if a debtor refuses to pay, an unregistered firm cannot sue. For this reason, TAXAJ strongly recommends registering the firm with the Registrar of Firms (Form 1 under the Partnership Act) — available in our Premium Package at ₹7,999. Register with TAXAJ →
💰 Section 40(b) — How to Maximise Tax Deductions in Partnership Firm
The biggest tax advantage of a partnership firm over a proprietorship is Section 40(b) deductions — which allow the firm to deduct remuneration paid to working partners and interest on their capital contributions as firm expenses, reducing taxable profit. Remuneration limits: On first ₹3 lakh of book profit (or in case of loss) — ₹1.5 lakh or 90% of book profit, whichever is higher. On balance — 60% of book profit. Interest limit: Maximum 12% p.a. on capital contribution. Critical condition: Both remuneration and interest rate must be expressly mentioned in the Partnership Deed — if not stated in the deed, the deduction is disallowed. This is why TAXAJ drafts the deed with specifically structured 40(b) clauses. A firm earning ₹10 lakh profit can reduce taxable income to ₹2–3 lakh through these deductions — saving ₹2–3 lakh in tax. TAXAJ files Partnership ITR-5 →
🏙️ Partnership Firm Registration in Delhi, Bangalore, Bihar, Mumbai
The partnership firm registration process varies by state. Delhi: Registration with Sub-Registrar of Firms, Delhi — Form 1 + stamp paper (as per Delhi Stamp Act) + notarised deed. Fees based on capital. Bangalore / Karnataka: Partnership Deed on Karnataka state stamp paper + registration under Karnataka Shops & Establishments Act + GST. Bihar: Partnership Deed under Bihar Stamp Act + registration with Inspector General of Registration. Maharashtra: Deed on Maharashtra stamp paper (0.1% of capital, min ₹500) + registration with Registrar of Firms. GST registration is pan-India — same process everywhere. TAXAJ has offices in Delhi, Bangalore and Bihar, with a CA team covering Maharashtra, UP, Tamil Nadu, Telangana, Gujarat, Rajasthan and all other states. State-specific stamp duty and form guidance included in every package. Start Registration →
🔄 When to Convert Partnership to LLP or Pvt Ltd?
A partnership firm should be converted to an LLP when: liability protection becomes critical (manufacturing, construction, professional services); when the number of partners grows beyond 5–6; or when turnover exceeds ₹1 crore making audit mandatory anyway. LLP offers all the tax benefits of partnership (30% rate, 40(b) deductions, partners' share exempt) plus limited liability protection. The conversion to Pvt Ltd is recommended when: you need venture capital or angel investment; when you want to give ESOPs to employees; when clients (especially MNCs and large corporates) require a company as a counterparty; or when you plan to go public eventually. TAXAJ handles the complete conversion from partnership to LLP → and from partnership/LLP to Pvt Ltd → without business disruption.
🔗 Related Services
Everything Your Partnership Firm Needs — TAXAJ Covers It
Deed drafting is just the start. TAXAJ manages all tax filings, compliance and legal needs throughout your firm's journey.
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GST Registration
GSTIN for firm
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GST Returns
GSTR-1 + 3B
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ITR-5 Filing
Partnership firm ITR
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MSME / Udyam
Free govt certificate
®
Trademark
Protect firm name
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TDS Compliance
TAN + 26Q + 24Q
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Convert to LLP
Limited liability
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Convert to Pvt Ltd
For funding/growth
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IEC Code
Import/Export
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Annual Compliance
ITR + GST calendar
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Proprietorship
Solo business
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Consult a CA
Free 15-min call
❓ FAQ
Frequently Asked Questions — Partnership Firm Registration
Under the Indian Partnership Act 1932, registration is voluntary — not mandatory. An unregistered partnership firm can operate legally. However, an unregistered firm cannot file a lawsuit against third parties or other partners in court to enforce its contractual rights (Section 69). This is the primary practical reason to register. TAXAJ recommends registering with the Registrar of Firms — especially for B2B businesses where contract enforcement matters. Our Premium Package (₹7,999) includes Registrar of Firms registration. Register now →
TAXAJ's Basic Package (Partnership Deed only) starts at ₹2,499 + GST. Standard Package (Deed + GST + MSME + PAN + bank assistance) is ₹4,999 + GST. Premium Package (everything + Registrar of Firms registration + Shop Licence + TAN + compliance calendar) is ₹7,999 + GST. Stamp paper cost (typically ₹500–₹2,000 depending on state and capital) and notary charges (₹100–₹500) are separate. All-inclusive guidance provided on these additional costs upfront.
A registered partnership firm: (1) Can file lawsuits against third parties and other partners to enforce rights; (2) Partners can sue each other for their dues under the deed; (3) Carries higher credibility with banks for loans and credit limits; (4) Preferred by government tenders and larger counterparties; (5) Registration certificate serves as additional identity proof for various licences. Registering costs approximately ₹2,000–₹5,000 depending on state — a small price for full legal protection.
Section 40(b) of the Income Tax Act allows a partnership firm to deduct remuneration paid to working partners (subject to limits: 90% of book profit for first ₹3L, 60% above) and interest on partners' capital (up to 12% p.a.) as business expenses before computing taxable income. This can significantly reduce the firm's taxable profit. Critical: Both remuneration amount/formula and interest rate must be explicitly stated in the Partnership Deed — if not mentioned, the deduction is disallowed by the Income Tax Department. TAXAJ drafts every deed with correctly structured 40(b) clauses.
A partnership firm can have a minimum of 2 partners. The maximum is 50 partners (as per the Companies Act 2013, Section 464). Exception: banking firms can have a maximum of 10 partners. There is no restriction on who can be a partner — individuals, HUFs and even companies can be partners. However, minors cannot be full partners — they can only be admitted to the benefits of the partnership with the consent of all partners and cannot be held personally liable.
Key differences: Liability — Partnership: unlimited joint and several personal liability; LLP: limited to contribution amount. Legal entity — Partnership: no separate entity; LLP: separate legal entity. Registration — Partnership: optional (deed only); LLP: mandatory MCA registration. Annual filings — Partnership: none (if unregistered); LLP: Form 8 and Form 11 annually. Tax rate — Both taxed at 30% flat with 40(b) deductions. Partners' share — Both exempt u/s 10(2A). If your main concern is limiting personal liability, LLP is better. If you want minimum compliance and quick start, Partnership is better. Register LLP →
Register Your Partnership Firm Today — CA Handles Everything
CA-Drafted Deed + GST + MSME + Section 40(b) Optimised — all-inclusive ₹4,999. Done in 7–10 days. Pan-India.
🏆 50,000+ Clients · 4.9★ Google · ⏱ Same-Day Deed · 📍 Delhi · Bangalore · Bihar · Goa