Partnership Firm Registration
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Start a partnership firm in India quickly and within one working day. Our consultation and support are available nationwide. We assist in drafting the partnership deed and obtaining the firm’s PAN, TAN, and GST Registration. Talk to our startup advisors for a quick and hassle-free start to your firm.
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IMPORTANT DISCLAIMER
We are a professional consulting firm specialising in company registration, taxation, accounting, payroll, compliance, and intellectual property rights (IPR) services to assist new and existing businesses in India. We provide our professional services at a reasonable fee, explaining the eligibility, process, and documents required for setting up and maintaining a business. We also prepare and file necessary applications with relevant government agencies such as the Registrar of Companies (ROC) and the Income Tax Department. We do not directly provide government documents or represent ourselves as a government agency.
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Overview of Partnership Firm Process in India
- Professional Fee
Starting at ₹4,999/- (Best Fee Guaranteed by Setindiabiz)
- Government Fee
The government fee for establishing a partnership firm in India consists of two components. First, there is the Stamp Duty on the partnership deed or agreement, and second, there is a fee charged by the Registrar of Firms. These costs vary from state to state.
- Timeline
The firm can be functional in 1-2 working days.
- Eligibility
- Partners: 2 to 20. (Max ten in banking business)
- A Registered Address
- Unique Name
- Adequate Capital (No Min or Max Limit)
- Only Indian citizens are eligible to start a partnership firm.
- NRI/PIO can be partners on a Non-Repatriation basis.
- Stepwise Process
Steps to establish a partnership firm:
- Draft an agreement of partnership/Deed
- Pay the appropriate stamp duty on the deed.
- Notary attestation is recommended.
- Registration of the firm is optional (recommended)
- Apply for PAN and TAN.
- Apply for GST registration if needed.
- Obtain the MSME registration for the firm.
- Protect the brand or trademark.
- If planning for export and import, apply for IEC.
- Documents Required
Documents Required to Setup Partnership
- Passport size colour photo
- PAN Card (Mandatory)
- Identity Proof of Partners
- Proof of Residence of Partners
- Proof of Registered Office Address
- NOC from the owner of registered office premises
Get Started with Partnership Firm Establishment
A Partnership Firm is a business entity established and regulated under the Indian Partnership Act of 1932. The Act defines a “Partnership” as a relation between two or more individuals who have agreed to share the profits and liabilities of a business. Such individuals are called “partners”, and the business they carry out in “Partnership” with one another is called a Partnership Firm. The basis of a Partnership Firm formation is a Registered Partnership Deed. It is a written document where all the terms and conditions mutually agreed between the partners are mentioned.
Key Features of a Partnership Firm:
Shared Profit & Capital
Unrestricted Liability
Optional Registration
Flexible Management
Limited Existence
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Checklist & Documents
To establish a Partnership Firm, you need to meet specific minimum requirements. These include the number of partners, the firm’s name, and its registered office. Below is the table listing the minimum requirements for forming a partnership firm and the documents required for registration as a partnership firm in India. The partners must fulfil both of these requirements to establish, incorporate, and operate a Partnership firm smoothly.
Minimum Requirements
- At Least 2 Partners
- Maximum 20 Partners
- A Unique and Valid Name of the Firm
- A Registered Office in the State
- Partnership Deed
List of Documents
- Documents of Partners
- PAN Cards
- Aadhar Cards
- Coloured Photographs
- ID Proofs
- Address Proofs
- Documents of Registered Office
- Proof of Address
- NOC from the Property Owner
- Rent Agreement/Property Tax Receipt
- Legal Documents
- Partnership Deed
Note: We recommend you send the soft copies of the documents. Also, please fill out the questionnaire our startup advisors will share with you. We will verify the information and legal documents sent to us. Please get in touch with us for further clarification.
Process of Partnership Registration with ROF in India
Registering a partnership firm in India requires filing an application with the Registrar of Firms (ROF) in the prescribed mode. Where the mode is online, applications can be accessed, filled out, and submitted on the Registrar of Firms (ROF) website. Where the mode is offline, the applicant must visit the ROF’s office in the state and apply manually. Regardless of the mode of application, the applicant must navigate through the following steps to complete the Partnership Firm Registration process.
STEP
01
Documentation for Partnership Registration
The Partnership Registration process in India starts with preparing the necessary documentation. The primary KYC documents of all partners, such as Aadhar, PAN, Residential address proof, and a colour photograph, are required. For the proof of the Principal Place of business, any utility bill of the premises along with the owner’s NOC is required.
STEP
02
Select a Name of the Firm
The name of your partnership firm must be unique and communicative in terms of its brand and business activity. Moreover, it should not be identical or similar to the name of an existing business or a registered trademark. To check the availability of the selected name, you can use the name search tool on the MCA and IP India websites.
STEP
03
Partnership Deed Registration
Partnership Deed is the legal basis for partnership firm formation in India. The deed is considered valid and legal only when appropriate stamp duty as per the state stamp act is paid. All partners must sign the Partnership Deed in the presence of the notary and two other witnesses.
STEP
04
PAN and TAN of the Partnership Firm
The application for allotment of the firm’s PAN, a crucial identifier for Income Tax compliance, is made in Form 49A. TAN is equally important for TDS compliance, which is necessary for any business. The application for TAN is filed in Form 49B. The Government assigns PAN and TAN to the firm, marking a significant step in the registration process.
STEP
05
GST Registration for Partnership Firm
GST registration for partnership firms is necessary to fulfil GST-related compliance requirements, such as paying taxes and filing GST returns. For this, an appropriate application with the required documents is filed with the GSTN for registration under the GST. After the GST registration is granted, the Department allotted a unique GSTIN to the firm. This GSTIN can be used for all GST-related activities in the future.
STEP
06
Partnership Firm Registration with the ROF
To register a Partnership firm in India, you must first check your state’s application mode. If your state allows online registration of a Partnership Firm, you can visit the official ROF website and apply along with the necessary documents and government fees. However, if the application mode is offline, you need to visit the office of the Registrar of Firms (ROF) to apply for partnership firm registration. After the application is processed, the ROF will register your firm and issue a Partnership Firm Registration Certificate in its name.
Benefits of Partnership Registration
Although registration of partnership firms is optional in India, Section 69 of the Partnership Act lists various adverse consequences. One of the most significant disadvantages of an unregistered partnership firm is its inability to institute a legal suit to recover anything more than ₹100 from a debtor. This is why every partnership firm must register with the Registrar of Firms. Please note that notary attestation or registration of the partnership agreement before the registrar of documents and deeds under the Registration Act does not amount to firm registration per se. Therefore, be careful while setting up the firm. Our expert advisors are equipped to help you set up your partnership business in India.
A registered firm has the following advantages.
Legal Recognition & Protection
Easier Dispute Resolution
Right to Sue & Be Sued
Enhanced Credibility
Easier Conversion to Other Business Structures
Partnership Firm vs Company
The table below compares a Partnership Firm structure with one of the most popular choices of entrepreneurs, viz., a Private Limited Company. By highlighting the advantages and disadvantages of the partnership firm against those of a company, we have attempted to help you make an informed choice of business structure based on your needs, suitability, and resources.
Partnership Firm
Pros
- Easy to Step Up
- Incorporation is an Option
- Flexible Management
- Lesser Compliances
- Low Cost of Operations
- Shared Liabilities Between Partners
- Limited Control by External Authorities
- Easy to Dissolve
- Privacy in Firm’s Affairs
Cons
- Unrestricted Liability
- Limited Investment Potential
- Limited Period of Existence
- No Separate Management Authority
Private Limited Company
Pros
- Limited Liability
- High Investment Potential
- Perpetual Existence
- Separate Management Structure
Cons
- Exhaustive Incorporation Process
- High Cost of Operations
- High Number of Compliances
- Long & Costly Winding Up Process
- Lack of Privacy
- Complex Decision-Making Process
- High Taxation
- Greater Social Responsibility
- Several External Regulations
FAQs on Partnership Firm Registration
1. What are the different types of Partnership Firms?
The Indian Partnership Act of 1932 regulates partnership businesses, offering two types of partnership firms: unregistered and registered. An unregistered firm is established based solely on a partnership deed. In contrast, registered firms are further registered with the Registrar of Firms (ROF).
2. What are the essential details mentioned in a partnership deed?
The law does not provide any specific format for a partnership deed. The deed can be drafted in any manner and contains details mutually agreed upon between partners. These details include:
- The main object and activities of the Firm.
- The effective date of formation of the Firm.
- The duration of the Firm.
- Capital sharing ratio between partners.
- Profit sharing ratio between partners
- Management and Administration of Partnership Firm
- The manner of resolving disputes
3. Can I convert a Partnership Firm into a Private Limited Company or LLP?
Yes, a partnership firm can be converted easily into a Limited Liability Partnership or a Private Limited Company, the manner for which has been prescribed in the Partnership Act 1932.
4. Do I have to file the annual return of the Partnership Firm?
Unlike a Limited Company or LLP, a partnership firm does not need to file its annual returns. However, Income Tax Return filing is applicable and mandatory for every firm, even if the firm has had no business in the previous financial year.
5. Is filing ITR returns and tax audits mandatory for Partnership firms?
Filing Income Tax Returns (ITR) is mandatory for a partnership firm at the end of every financial year. The ITR must be filed on or before the prescribed due date, 31st July. There is no mandatory requirement for firms to conduct annual tax audits. However, the tax audit is applicable when the turnover crosses Rs.1 crore (business turnover) or Rs.50 lakhs (professional services turnover) in a financial year.
6. Who makes the managerial decisions in the partnership firm?
Since there is no separation between ownership and management in a partnership firm, the partners are severely and collectively responsible for the firm. One partner’s decision shall be binding on every partner of the firm.