Law Firm Registration in India

Narendra Kumar

17 Jun, 2019

Registration of a Law Firm in India

A lawyer bubbling with entrepreneurial desire always dreams of establishing his own Law Firm instead of forever taking instructions from his senior in the court or the Managing Partner in the firm. Thus many lawyers decide to open up their own law firms and be the master of their own practice.

Only lawyers who are duly admitted as advocates on State rolls can set up a law firm.

A person may be admitted as an advocate on a State roll when the following conditions are fulfilled:

1. he is a citizen of India: A national of any other country may be admitted as an advocate on a State roll if the duly qualified citizens of India are permitted to practice law in that country;
2. has completed the age of 21 years;
3. Has obtained a degree in law, from any university in India recognized by the Bar Council of India; OR from any university outside India which is recognized by the Bar Council of India.

In What Form Should A Law Firm Function- Sole Proprietorship, Partnership Or LLP?

A law firm may function of any of the three with pros and cons for each:

1. Sole Proprietorship: single man brings in the finance and heads all the functions of management, accounts, bringing in the clients, bringing in resources etc. Though the authority is far higher and so is the accountability. Here, since there is no distinction between the individual and the legal entity, the individual’s assets shall be liable to pay off any debts that may incur in the future. Also, an individual’s knowledge may restrict the firm to a particular field of work and there may not bring in diversity.

Registering the same is a fairly easy task without too many compliances in the checklist for the future. A bank account may be opened in the name of the firm which requires a letterhead of the firm with its address of operation, Letter from CA regarding the nature of the business.

2. Partnership Firm: Like minds when decide to come together bringing in their resources, knowledge and most importantly (for a law firm), connections and clients, they may decide to form a Law Firm in Partnership. The benefit herein is that not only the work sphere is diverse and resources are brought in by more than one person, but also that the firms are able to generate more trust from clients. The profit sharing is decided upon by the Partners mutually relying on various factors like operations, management etc.

General Partnership: This is considered as the easiest form of business. The partners have unlimited liability which means their assets are personally liable for the debts of the firm. A Partnership does not require to be registered but is always a wise option so as to give it legal standing.

Steps to getting the Partnership firm registration:

1. Registering a Partnership Deed with all the essential details like Name of the Firm, details of the partners, capital contribution, profit sharing etc
2. Pan Card to be applied for in the name of the Partnership Firm
3. A bank account to be opened in the name of the partnership Firm

Documents required for registration:

1. Application of registering the Partnership in FORM-1
2. Certified copy of Partnership Deed
3. Pan Card &Identity proofs of the partners
4. Pan card of the Partnership Firm
5. Proof of registered office

3. Limited Liability Partnership: It offers more enhanced features than a traditional partnership by providing the benefits of both private limited and General Partnership. One partner is not liable for another partner’s misconduct or wrong decisions. Each partner shall have own liability towards the Business.

Steps involved in LLP Registration

1. Name Approval
2. Obtaining the Digital Signature Certificate, Designated Partner Identification Number
3. Obtaining Pan Number
4. Filling up the Incorporation form with supporting documents

Documents Required:

1. For Registered Office, any Utility bills or scan copy of Rent agreement with NOC from the owner
2. From Partners
   • Affidavits
   • PAN Card or Passport or Election ID Card
   • Latest Bank Statement/Telephone or Mobile Bill
   • Voter’s ID/Passport/Driver’s License
   • Scan copy of Signature (signature should same as on PAN Card)

What is the Fate of Foreign Law Firms in India?

In March 2018, the Supreme Court gave its decision upon the fate of foreign law firms in the country. It was held that held that foreign law firms cannot set up their offices in the country or practice in Indian Courts. However, they can advice Indian clients on a “fly in and fly out” basis, which also includes non-litigation work without establishing a regular practice.