Partnership Registration
Our Price
Market Price : INR 10,500
Our Price : INR 5,999 Only
Savings : INR 4,501
Govt Fees : Inclusive in the price above
Time for Registration : 7 to 10 Working Days
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Partnership Firm
A partnership business, by definition, consists of two or more people who combine their resources to form a business and agree to share risks, profits and losses. Common partnership business examples include law firms, physician groups, real estate investment firms and accounting groups.
By comparison, a sole proprietorship puts all of those responsibilities on one person, while a corporation operates as its own legal entity, separate from the individuals who own it. A limited liability company, or LLC, is a hybrid of a partnership and a corporation, allowing owners to take on profits and losses without any personal liability or taxes on the business itself.
For many individuals, going into business with a partner is a chance to forge experience, expertise and endeavors with others.
Elegibility
A partnership is easy to form since no complex business formalities are required to be fulfilled. The Partnership Act, 1932 regulates the registration of partnership firms in India. A minimum of two persons is required for the registration of the partnership firm.
Partnership registration is not compulsory and is at the discretion of the partners whether they want to register the partnership firm or not. But a partnership firm cannot avail legal benefits if it is not registered, hence it is always advisable to register it.
Documents for Partnership Registration
Partnership Firm
Documents required for Registration of Partnership Firm
1. Copy of PAN
2. Copy of Adhar
3. Passport Size Photo
4. Name of firm
5. Copy of latest electricity bill (For Office Address)
6. Copy of Rent Agreement (if office is rented)
7. Consent Letter (For use of office)
8. Work List
9. Manner of Work e.g Retail, Whole sale, Import, Export etc.
Procedure of Partnership Firm Registration
According to the India Partnership Act 1932, there is no time limit as such for the registration of a firm. The firm can be registered on the date when it is incorporated or any such date after so. The requisite fees and fines must be paid. The procedure for such a registration is as follows,
1] Application to the Registrar of Firms in the prescribed form (Form A). Nowadays this facility is even available online. Such an application must contain certain basic details about the firm such as,
- Name of the Partnership Firm
- Name and address of all partners
- Place of business (address of main and branch offices)
- Duration of the partnership
- Date of joining of partners
- Date of commencement of business
2] The duly signed copy of the Partnership Deed (which contains all the terms and conditions) must be filled with the registrar
3] Deposit/pay the necessary fees and stamp duties
4] Once the registrar approves the application, the firm will be entered into the records. And the registrar will also issue a certificate of incorporation.
And this is how the process of registration will be completed and the firm will attain legal recognition.
Benefits of Partnership Registration
The advantages of registering a partnership firm are mentioned follow:
1. Potential to sue the firm or sue the other partners:
If any conflict should arise between the partners or between the current and previous partners or even between one of the partners and the firm itself, and provided the conflict thus arising is out of the terms dictated in the partnership deed or the dispute is upon the rights vested on the partner by virtue of the Partnership Act, then a partner belonging to the firm in which the partnership is registered can always move to the Courts of Law. This privilege is not given to a partner of an unregistered firm, although he can initiate a criminal proceeding against the wronged partner(s).
2. The capacity of the firm to sue third parties:
In a registered partnership firm, one or more partners can always file a case in court when any of their contracts are not honoured. Partners of an unregistered firm are not given this lenience.
3. Right to use the principle of set-Off:
If the partnership firm is issued by another party to recover a sum the firm owes to this party, the firm can use the principle of set-off against this third party provided the latter also owes some amount of money to the partnership firm. The registered partnership firm can simply counterbalance the amount it owes to the third party. This arrangement is not feasible in the case of unregistered partnership firms.
4. Better credibility:
Despite the fact that the Partnership act renders both a registered and unregistered firm legal, it is a, sure enough, case that a registered partnership firm looks more credible in the eyes of a potential client.
5. Ability to convert into an entity:
A registered partnership firm always has the ease of converting itself to another corporate entity like that of a Limited Liability Partnership (LLP) or a private company. This ease of conversion is not bestowed upon an unregistered firm.
Frequently Asked Question
Not necessarily. However, unless a partnership firm is registered with the registrar of firms and societies, the rights of the partners inter se or against strangers cannot be enforced in a court of law. If the partnership deed itself creates, transfers or affects an interest in immovable property.
No, it is not necessary. However it is often prudent to make a partnership deed to produce to the bank, income tax authorities and to clients with whom the partnership firm deals with.
Yes. A person may become a partner with another for a single adventure or undertaking.
Yes. If the number of partners is more than 20, it has to be registered as a company.
A person may sue a partnership firm but the plaint has to disclose the name of all the partners who constitute the firm. However under the Income Tax Act, a firm can be assessed to tax independently of its partners. A partnership firm therefore enjoys a quasi independent status.
Yes. The law presumes that each partner is an agent of the other and dealing in good faith with one partner binds the other partners as well. There are certain exceptions to this rule, which is answered in the next question.
Submitting a suit for arbitration, transfer of immovable property, acquisition of immovable property, withdrawal of suits is all forbidden except by the consent of all partners or by the usage of custom to the contrary.
Yes. The firm and all the partners are liable for the wrongful act or fraud which causes loss or injury to any third parties.
Every partner will be liable for the acts of the firm even if he has retired, if he has failed to give public notice of his retirement. Such notice should be given to the registrar of firms an by announcements in the local official gazette.
Yes. The death of a partner automatically dissolves the partnership firm. It is however usual for the partnership deed to provide before hand that the firm should continue in spite of death, retirement or insolvency of a partner.
When the partnership deed does not contain any provision for the duration of the partnership nor conditions for the termination of partnership, it is a partnership at will.
Any property can be treated as the property of the firm by simply showing it as such in the book of accounts. This would constitute partnership property and all partners are joint owners of the partnership property as increased or decreased by profits in the course of business. Property belonging to an individual partner does not become the firm’s property simply by being used for the purpose of the partnership.