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Partnership Registration
To start a partnership firm, the partners need to enter into a partnership deep. The deed should ideally be in writing and get it notarised. The registration of the firm is not mandatory, however, strongly recommended.

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Partnership Firm Registration

Start your Partnership Firm quickly with our experience of 14+ years of delivering quality professional services. Our dedicated team will help you to register your partnership firm across India. We will extend our support in Documentation, Preparation, filing, and subsequent Follow-up with the registrar of firms.

The Stepwise Process to Start a Partnership Firm

  1. Find out the stamp duty on Partnership Deed
  2. Draft Partnership Deed and Get is Notarised
  3. Apply for Pan Card of the Partnership Firm
  4. Obtain TAN Number from the Income Tax Dept
  5. Open Bank Account
  6. Go for GST Registration & MSME
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Important Points of Partnership Form of Business

Minimum Two Person

Minimum Two Person

Two person is needed to become partners of the firm. However, maximum 20 partners are allowed in a firm (10 in banking business)

No FDI is Allowed

No FDI is Allowed

Foreign investment in a partnership firm is not permitted. In the firm, only Indian citizen can become the partner and start the partnership firm.

No Minimum Capital

No Minimum Capital

No minimum capital is prescribed, it must be based on the business requirements. The Stamp Duty on the deed is based on the capital of the firm.

Unique Name

Unique Name

Name of the firm should be unique, and it must not same or similar to the name of any existing trademark which is registered or applied.

Documents Required For Partnership Registration

Basic Documents to Start a Partnership

  • Notarised Partnership Agreement
  • Proof of Registered Address
  • It should not be older than 2 months
  • NOC from the Owner of Premises

Documents of all partners of the Firm

  • Two Photograph
  • Copy of PAN Card
  • Valid Identity Proof
  • Latest Address Proof
  • Documentation - Day - 1

    The process starts with documentation of the partners and the place of business where from where the firm shall be operating its business in India. Ensure that the documents are updated and correct. The list of documents required is provided above for your reference. We shall also require information in the Questionnaire Partnership Firm For Partnership Formation.

  • Selection of Name - Day - 1

    The name of the partnership firm should be cross-checked with the trademark registry to avoid any infringement of someone else Trademark or brand name. The selection of a proper name should be starting point, we search the proposed name of the firm in the trademark register to avoid any infringement on someone else's trademark. To learn more on trademark click here

  • Drafting of Partnership Deed - Day - 1

    The Partnership Agreement or the Deed is the main document of the firm and is also considered as the constitution of the firm which determines the mutual rights of the partners among themselves. This document also specifies the capital and profit sharing ratio and how the firm shall be operated by the partners.

  • Payment of Stamp Duty for the Partnership Deed - Day - 1

    After the draft partnership agreement is approved and adopted by the parties the stamp duty on the partnership deed has to be paid which varies from state to state and on the capital of the partnership agreement. In none of our packages we have included the value of stamp duty and it is required to be paid by clients on actual basis.

  • Signing of Partnership & Notary of Deed - Day - 2

    Finally the partnership deed is signed by the partners in the presence of two witnesses and thereafter the deed should be notarised by presenting the same before a notary public.

  • PAN Number Allotment - Day - 2-7

    The partnership firm needs to make an application in the prescribed form before the income tax department for the allotment of PAN, The acknowledgement of pan application for the partnership firm is received within the same day, however, the pan is allotted within a week time.

  • TAN Number Allotment - Day - 2-7

    TAN number is a permanent number allotted to business for complying with the provisions of withholding tax. You are required to deduct TDS while making payments, hence the next step is to obtain TAN number, which is mandatory to submit TDS Returns.

Frequently Asked Questions

What is the difference between Partnership Firm and Other Forms of Business?

We have prepared a detailed and easy to understand comparative table showing availability of features and advantages of one form of business to that of others. The same can be found at the end of this page. Click here to go there. compare form of business

What are the pre-requisites for Starting a Partnership Firm in India?

To start a partnership firm, the minimum number of partners is two, whereas the maximum number of partners can be 20. The partners must come together to carry on any legal business with the motive of earning profits.

What are the types of Partnership Firm?

The partnership business is regulated under Indian Partnership Act, 1932. Which prescribes possibility of two types of the firm, unregistered firm, and registered firm. An unregistered firm is formed by entering into an agreement between two competent persons, known as partners, where the firm is not registered with the registrar of firms. Whereas the firms which subsequently get registered with the registrar of firms by submitting the copy of partnership deed and KYC of partners and the registered office is known as the Registered Partnership Firm.

What are the advantages of a Registration of Partnership firm?

Though the Indian Partnership Act, 1932 does not make registration of partnership mandatory, section 69 places certain disadvantages to an unregistered firm. Following are the disadvantages of an unregistered firm.

  • Only a registered partnership firm can claim a setoff
  • An unregistered partnership cannot recover any sum due from third parties if the amount in question is more than Rs. 100/-
  • Only a registered partnership firm can file a legal suit in the court of law for the enforcement of rights against partners.
  • The partners of an unregistered firm cannot file suit against another partner of the firm or the firm itself.

Hence, we strongly advise registering the partnership firm. An unregistered firm can be registered at any time. Every state government has established the office of the registrar of firms, which is vested with the powers to register the firm and issue the Certificate of Registration of the Firm and a copy of the extracts of the register of firms where the partnership name has been entered.

Under which Government Authority, the application of Partnership Firm Registration is submitted?

The application for registration of partnership firm is filed with the Registrar of Firms having jurisdiction over the place of business of the partnership firm. The registrar of firms after receipt of the application complete in all aspects with all required documents registers the firm within 1-2 weeks and issues the Certificate of Registration of Firm.

What are important points to be included in the partnership deed for registration of the partnership firm?

The law does not provide any specific format for the partnership deed, it is up to the partners what they agree and reduces in writing at the time of starting their partnership firm. The partnership once entered can be changed any number of times. However, each amendment of the deed must be filed with the registrar for its registration. Below is the list of items which should form part of the agreement.

  • The main object and activities of the Firm,
  • The effective date of the firm,
  • The duration of the Partnership Firm,
  • The clause relating Capital Contribution,
  • Profit sharing ratio of the partners,
  • Management and Administration of Partnership Firm,
  • How to resolve disputes,
  • The deed must be signed before two witnesses,
  • The deed should be notarized

What is the Stamp Duty on which Partnership Deed is made and is Notary on Partnership Deed necessary?

The stamp duty on the partnership deed varies from state to state, and within one state it further varies based on the capital of the firm. You must correctly consider the applicable stamp duty on the partnership deed. The notary of the deed is an essential requirement for partnership registration.

How to apply and get the PAN and TAN of the Partnership Firm?

The PAN is a ten-digit alphanumeric number allotted by the Income Tax Department, the application for pan card is filed in Form No 49A. The TAN is a number allotted for TDS Compliance, the application for TAN is filed in Form No 49B. Normally it takes around 6-10 days in PAN allotment and Pan Card Delivery.

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 partnership is an old method of doing business; we always recommend to start a business in the Private Limited form

How easy is to start a partnership business in comparison to other forms of business?

A partnership business begins with the creation of an agreement by the partners. As the registration is not mandatory, the business can start on the same day of agreement of the partners. However, the Notarization of the agreement or its registration with the registrar of documents may be taken up later on. Similarly, the registration of firm with the registrar of firms can also be taken up in due course of time. Hence it can be rightly said that it's comparatively easy to start a partnership.

What is the law on Name of the Partnership, is there any restriction on keeping a particular name of the partnership firm?

A Partnership is started by its partners with a separate name in the deed, which is known as the name of the firm. While deciding a name, the care should be exercised to check if it conflicts with some one's else trademark. Our specialists shall be providing you with free consultancy on Name Check and how to protect Business Name, its Logo, Punchline, etc.

Do I have to file an annual return to the registrar of firms?

Unlike Limited Company or LLP, there is no need to file the annual return for a partnership firm. However, income Tax Return shall be necessary to be submitted at the end of the financial year and within Due Date of filing. There is no provision of audit under the partnership, Act hence a firm does not require to get its books audited. However, if the turnover crosses 2 Crore, then tax audit is mandatory.

Who makes decisions in the partnership firm?

Under partnership form of business, there is no separation of ownership and control. The partners act in confidence to each other and act of one partner is binding on another. Partners monitor and manage the firm without any interference. The decision making in case of a firm is relatively a fast process in comparison to that of the Private Limited company, Limited Liability Partnership (LLP)

Should a partnership firm be registered?

There is no provision under the partnership Act, 1932 which mandates the registration of partnership. However, the act itself provides for the procedure of registration of firm. Thus the registration is optional but highly recommended, as an unregistered firm shall not be able to recover any money in excess of INR 100/-. Apart from the above legal impediment, from the practical point of view also the firm should get registered in order to bring certainty in the relationship of partners and the firm per se.

Is a written partnership deed necessary to form a partnership firm?

No, it is not necessary. As the contract act does not makes it necessary to have the agreement in writing. However, it is always prudent to make a partnership deed to produce to the bank, income tax authorities and to clients with whom the partnership firm deals with. Apart from serving as a reference document a written partnership deed also helps in reducing conflict and confusion in due course of time.

Can a partnership firm be sued in the name of the firm?

Yes. A partnership firm can sue or be sued in its own name. The firm is treated separately from its partners. However, the partners do not enjoy limited liability as available in case of LLP or a company. In a situation where the firm is not in a position to discharge its liabilities, the partners shall be called in to pay the liabilities of the firm.

Can a partnership be constituted for a particular business undertaking?

Yes. A person may become a partner with another for a single adventure or undertaking. The term of partnership firm can be for a specific period or for the completion of a specific project or at will. The deed must have a specific mention about the tenure of the partnership agreement. The Even partnership which is created for a specific purpose can be closed before the term with the consent of all the partners.

Am I personally liable for my business under a sole proprietorship?

Yes. Unlike other incorporated business forms, you are personally liable for any of your sole proprietorship’s debts or legal judgments against your business. This means that in order to satisfy debts owed by your business, debt collectors can come after your personal assets, homes, cars, etc. For this reason, alone, you should be extremely cautious about setting up a sole proprietorship. Setindiabiz.com recommends One Person Company in place of proprietorship.common-question-bottom

Can one deal with one of the partners of a partnership firm?

Yes. The law presumes that each partner is an agent of the other and while dealing with third parties the partner is representing the partnership firm in good faith. The acts done by one partner is binding on another even if it is not in the knowledge of the other party.

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