To start a Partnership Registration Procedure, To start a Partnership business, partners need to enter into an agreement which is popularly known as Partnership Deed. Different states impose stamp duty on the partnership deeds, it means while creating a partnership instrument (Deed) the partners must purchase stamp paper of appropriate value to be annexed with the agreement. An agreement can further be notarized. To bring more credibility to the document which is admissible under the law without any doubt the same can be registered as a document by filing the same before the registrar of documents. Such an act of getting the deed notarised or registered with the registrar of documents does not amount to the registration of partnership firm as such. Though registration of partnership Firm has not been mandatory under The Partnership Act, 1932, however, section 69 of the act specifies the effect of Non-Registration, which means an unregistered firm shall not be able to recover any sum more than Rs. 100. Thus it is strongly recommended to the partners to get the firm registered. The registration of Firm can be obtained by filing the deed and Know Your Customer (KYC) Documents of the partners and KYC of premises where the address of firm shall be situated.
Advantages of Partnership Registration
Easy to Start
A partnership business begins with the creation of an agreement by the partners. As the registration is not mandatory, the business can start within the same day of understanding/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.
A Partnership is started by its partners with a separate name in the deed, which is known as the name of the firm. Which over a period acquires goodwill and value. 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.
Annual Filing NOT Required
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.
Under partnership form of business, there is no separation of ownership and control. Partners monitor and manage the firm without any interference. The partners act in confidence to each other and act of one partner is binding on another. The decision making in case of a firm is relatively a fast process in comparison to that of private Limited company, Limited Liability partnership (LLP)
Flexibility in operation
The law dealing with the affairs of the partnership business does not require for any particular method of doing things like the article of association in case of a company. Thus the affair of the partnership is regulated by the agreement of partners which lays down the procedure of running day to day operation of the firm. In real sense, there is enough flexibility in operation of the partnership
More Capital Available
In contrast with the proprietorship business where only one person invests in the capital of the business, In the case of the partnership firm, as there are many partners, this means that with more partners more money can be introduced as capital in the firm. Further, in due course of time, another partner can be added to introduce the fresh round of capital.