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Partnership Firm Registration

A Partnership Firm is a popular form of business constitution for businesses that are owned, managed and controlled by an Association of People for profit. Partnership firms are relatively easy to start are is prevalent amongst small and medium sized businesses in the unorganized sectors. With the introduction of Limited Liability Partnerships in India, Partnership Firms are fast losing their prevalence due to the added advantages offered by a Limited Liability Partnership.

There are two types of Partnership firms, registered and un-registered Partnership firm. It is not compulsory to register a Partnership firm; however, it is advisable to register a Partnership firm due to the added advantages. Partnership firms are created by drafting a Partnership deed amongst the Partners and Ashoka Consultancy can help start a registered or un-registered Partnership firm in India.

Partnership Firm are the most popular forms of business organisations in India for the Partners Entrepreneurs. its need just only 2 Person to Start a Business.

What is a General Partnership?

A General Partnership is a business structure in which two or more individuals manage and operate a business in accordance with the terms and objectives set out in the Partnership Deed. This structure is thought to have lost its relevance since the introduction of the Limited Liability Partnership (LLP) because its partners have unlimited liability, which means they are personally liable for the debts of the business. However, low costs, ease of setting up and minimal compliance requirements make it a sensible option for some, such as home businesses that are unlikely to take on any debt. Registration is optional for General Partnerships.

Essential Facts on Partnership

What is a partnership firm?

A partnership firm is a business structure in which two or more individuals manage and operate a business in accordance with the terms and objectives set out in a Partnership Deed that may or may not be registered. In such a business, the members are individually partners and share the liabilities as well as profits of the firm in a predetermined ratio.

Why should I set up a partnership firm?

A partnership firm is best for small businesses that plan to remain small. Low costs, ease of setting up and minimal compliance requirements make it a sensible option for such businesses. Registration is optional for General Partnerships. It is governed by Section 4 of the Partnership Act, 1932. For larger businesses, it has lost its relevance with the introduction of the Limited Liability Partnership (LLP). This is because an LLP retains the low costs of a partnership while providing the benefit of unlimited liability, which means that partners are not personally liable for the debts of the business.

Is a partnership firm a separate entity?

The partners in a partnership firm are the owners, and thus, are not separate entity from the firm. Any legal issues or debt incurred by the firm is the responsibility of its owners, the partners.

How many partners can there be?

A partnership must have at least two partners. A partnership firm in the banking business can have up to 10 partners, while those engaged in any other business can have 20 partners. These partners can divide profits and losses equally or unequally.

Is partnership firm registration necessary?

No, registration of a partnership is not necessary. However, for a partner to sue another partner or the firm itself, the partnership should be registered. Moreover, for the partnership to bring any suit to court, the firm should be registered. For this reason, it is recommended that larger businesses register the partnership deed.

What are the main aspects of a partnership deed?

The deed should contain names of the partners and their addresses, the partnership name, the date of commencement of operation of the firm, any capital invested by each partner, the type of partnership and profit-sharing matrix, rules and regulations to be followed for intake of partners or removal.

Advantages of Partnershipfor more details fill up following form

Key Features of Partnership Firm -

2 Person Required as Partners.
Partners share responsibilities and duties of the business.
More capital can be brought into the business.
Partners share responsibilities and duties of the business.

Easy to Start

A Partnership is easy to form as no cumbersome legal formalities are involved. Its registration is also not essential. However, if the firm is not registered, it will be deprived of certain legal benefits. The Registrar of Firms is responsible for registering partnership firms.

Business Name

Since the name of a Partnership firm is not registered, a Partnership firm can choose to have any name - as long as it does not infringe on a registered trademark. However, since the name is not registered, any other person can also use the same business name unless trademark registration is obtained.

Annual Filing NOT Required

A Partnership firm is not required to file its annual accounts with the Registrar each year unlike a Limited Liability Partnership or Company. Limited Liability Partnership's and Company's are required to file their annual accounts with Registrar of Companies each year.

Steps Taken to Register a Partnership Firm

Choose Partnership Firm Name.
Create Partnership Agreement or Deed with the help of MyOnlineCA Professionals.
Apply for PAN Card on the name of Partnership Firm.
Opening of Current Bank Account on the basis of PAN Card and Registered Partnership Deed.

Documents Requirements :

ID and Address Proof of Partners like Pan Card/Passport/Voter ID/Aadhar Card/Driving License Copy of the Partners.
One Business Place Address proof :-
if Property on Rented :- Need Rent Agreement and NOC from Landlord.
if Property is own :- Need Electricity Bills or any other Address Proof.
Note : Business place and home place can be same of the Partners.

Compare between Partnership Firm, Limited Liability Partnership, One Person Company, Private Limited Company, Sole Proprietorship,

  Partnership Firm Limited Liability Partnership One Person Company Private Limited Company Sole Proprietorship
Recommended For Home businesses Professional services firms Solo promoters Start-ups and growing companies Small manufacturers & traders
Ease of Accommodating Investment Almost impossible Possible, but unlikely Possible, but severely unlikely Very easy to accommodate Impossible
Limited Liability Protection No Yes Yes Yes No
Tax Advantages Minimal Most efficient Few benefits Few benefits Minimal
Perpetual Existence No Yes Yes Yes No
Statutory Compliances Minimal Low High High Minimal

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Partnership-Firm Registration in India
Partnership Firm Registration in Andaman and Nicobar Islands Partnership Firm Registration in Andhra Pradesh Partnership Firm Registration in Arunachal Pradesh Partnership Firm Registration in Assam
Partnership Firm Registration in Bihar Partnership Firm Registration in Chandigarh Partnership Firm Registration in Chhattisgarh Partnership Firm Registration in Dadra and Nagar Haveli
Partnership Firm Registration in Daman and Diu Partnership Firm Registration in Delhi Partnership Firm Registration in Goa Partnership Firm Registration in Gujarat
Partnership Firm Registration in Haryana Partnership-Firm Registration in Himachal Pradesh Partnership Firm Registration in Jammu and Kashmir Partnership Firm Registration in Jharkhand
Partnership Firm Registration in Karnataka Partnership Firm Registration in Kerala Partnership Firm Registration in Lakshadweep Partnership Firm Registration in Madhya Pradesh
Partnership Firm Registration in Maharashtra Partnership Firm Registration in Manipur Partnership Firm Registration in Meghalaya Partnership Firm Registration in Mizoram
Partnership Firm Registration in Nagaland Partnership Firm Registration in Odisha Partnership Firm Registration in Puducherry Partnership Firm Registration in Punjab
Partnership Firm Registration in Rajasthan Partnership Firm Registration in Sikkim Partnership Firm Registration in Tamil Nadu Partnership Firm Registration in Telangana
Partnership Firm Registration in Tripura Partnership Firm Registration in Uttar Pradesh Partnership Firm Registration in Uttarakhand Partnership Firm Registration in West Bengal
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