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Partnership Firm - Registration

A Partnership is a business structure in which two or more individuals manage and operate a business in accordance with the terms and goals set out in the PartnershipDeed. Partnership registration is relatively easy and is prevalent among small and medium sized businesses in the unorganized sectors.

For Partnership Registration, you must agree on a firm name and then establish a partnership deed. It is a document stating respective rights and obligations of the partners and to be valid it should be written and not oral. The terms of the Partnership Deed can be varied to suit the interests of the partners and can even be made contrary to the Indian Partnership Act, 1932 but if the Partnership Deed is silent on any point, then the provisions of the Act would apply.

Procedure to Partnership Registartion

Once a name for the company is decided, the following steps have to be taken by the applicant

Fix The Name and Object of the Partnership Firm

Fix The Profit Sharing ratio and Capital Contribution of the partners

Prepared the Partnership deed

Apply Register of Firms for registration

Submit Documents and get Registration certificate

Open a current bank account of the Partnership firm

Documents required to register a Partnership Firm

PAN Card

PAN Card of shareholders and Directors.
Foreign nationals must provide a valid passport

Identity Proof

Aadhar card and Voter ID/ Passport/ Driving License of Shareholders and Directors.

Director’s Address Proof

Latest Telephone Bill /Electricity Bill/ Bank Account Statement of Shareholders and Directors.

Photograph

Latest Passport size photograph of Shareholders and Directors.

Business Address Proof

Latest Electricity Bill/ Telephone Bill of the registered office address

NOC from owner

No Objection Certificate to be obtained from the owner(s) of registered office

Rent Agreement

Rent Agreement of the registered office should be provided if any

F.A.Q

  • 1. What is Partnership firm?

    A partnership is a form of business where two or more people share ownership, as well as the responsibility for managing the company and the income or losses the business generates.

  • A minimum of two Persons is required to start a Partnership firm. A maximum number of 20 Partners are allowed in a Partnership firm

  • The Partner must be an Indian citizen and a Resident of India. Non-Resident Indians and Persons of Indian Origin can only invest in a Proprietorship with prior approval of the Government of India.

  • There is no limit on the minimum capital for starting a Partnership firm. Therefore, a Partnership firm can be started with any amount of minimum capital.

  • Partnership firms are registered by the Registrar of Firms, under the Indian Partnership Act, 1932.

  • Only a registered Partnership firm can file a suit in any court against the firm or other partners for the enforcement of any right arising from a contract or right conferred by the Partnership Act. Also, only a Registered Partnership firm can claim a set off (i.e. mutual adjustment of debts owned by the disputant parties to one another) or other proceedings in a dispute with a third party. Hence, it is advisable for Partnership firms to get itself registered sooner or later.

  • There are restrictions on the transfer of ownership interest in a Partnership firm. A Partner cannot transfer his/her interest in the firm to any person (except to the existing partners) without the unanimous consent of all other partners.

  • Partnership firm will have to file their annual tax return with the Income Tax Department. Other tax filings like service tax filing or VAT/CST filing may be necessary from time to time, based on the business activity performed. However, annual report or accounts need not be filed with the Ministry or Corporate Affairs, which is required for Limited Liability Partnerships and Companies.

  • It is not necessary for Partnerships to prepare audited financial statements each year. However, a tax audit may be necessary based on turnover and other criterion.

 
     
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