Partnership registration

What is Partnership Business

It is a business entity that is formed, operated, and managed by a group of individuals named as partners. While most small and medium business persons especially belonging to the unorganized sector, preferred to form a partnership before, the efficacy of this kind of business is steadily losing its relevance due to the popularity and umpteen benefits that a limited liability company enjoys at present

Types of Partnership Firms

  • Registered- Functions according to the rules of the Partnership Deed and the ‘Indian Partnership Act’ of 1932. It is possible to take legal action against a partner who violates the code once the business has been registered.
  • Unregistered- Depends heavily on the Partnership Deed that can be modified with the concurrence of all partners. However, the partners cannot be sued in a court of law for violating the rules.

Information to be included in the Partnership Deed

  • Names & addresses of all partners
  • Partnership name
  • Date when the business became operational
  • Capital provided by each partner
  • Profit sharing percentage for each partner
  • Rules for adding more partners
  • Rules for removal of a partner
  • Rules for dissolving the partnership

Requirements for Registration of a Partnership Business

  • The firm must include at least two partners
  • There is no amount specified as the minimum capital required to start a partnership firm
  • Registration of the company is not mandatory but most legal professionals advise it in order to avoid legal actions taken by any of the partners in future
  • A partnership deed is required to be prepared that includes all the terms and conditions of the business including profit and liabilities sharing percentage
  • The partners are considered to be owners of the business and a partnership company is not regarded as a legal entity.

Advantages of registering your business as a Partnership Firm?

  • Simple, uncomplicated process requiring very less formality
  • Registration is not mandatory to form and operate a partnership business
  • However, bigger firms opt to register their business and the formalities are overseen by the ‘Registrar of Firms.’
  • The company can choose to operate in any name as long as it does not violate the trade mark regulations.
  • The company is not required to file their accounts annually with the Registrar unlike other business entities.
  • The firm can sue any partner or a third party for compensation, if it remains unregistered.
  • It is cost effective and the expenses being considerably lesser than a LLP

Documents required to Register a Partnership Firm Registration

  • Self attested PAN Card (2 Copies) 
  • self attested Address Proof - Voter ID/Adhaar Card/ Driving License/Passport  (2 Copies)
  • 4 passport size photographs
  • self attested Bank Statement/ Electricity Bill/ Mobile Bill/ telephone Bill not older than one month (passbook copy is not accepted)
  • Rental agreement and electricity bill of office address(Electricity bill not older than 1 month) if rented premises

You will get the documents after Registration of your Company

  •  Partnership Deed Registration
  •  PAN