What is Partnership Firm?
Partnership Firm is the most suitable type of business structure as it is very easy to form, and a minimum of two people are required to form a Partnership Firm online. In a Partnership firm, there are very minimal compliances in comparison to other business entities.
In simplified language, we can say that partnership creates a relationship between two or more people who have agreed to carry on a business for profit, and these people are known as partners.
Enterslice is India's leading platform in providing professional legal services through an online platform, and our team of professionals can make the Partnership Firm Registration process quick and hassle-free.
What is a Partnership Firm Registration?
To set-up, a Partnership Firm in India, partnership firm registration is not necessary however it is always advisable to register a partnership firm to avail the legal benefits which cannot be availed in case the partnership firm is not registered. Partnership Firm registration is the complete discretion of partners.
What are the features of Partnership Firm Registration in India?
It is good to form partnership Firm in India, because of the below-mentioned features:
- Minimum two persons are required
- Responsibilities and duties are shared among the partners of the Company
- Easy to set-up as partnership firm registration is optional
- Minimal legal formalities
- Fewer Compliances
- A minor cannot become a partner
- Flexibility in decision making
- Inexpensive to establish
What will be the consequences if the Partnership Firm is not registered?
Without Partnership Firm registration, a partner cannot enforce its rights given under the Indian Partnership Act, 1932. In case of dispute with the third party, the firm cannot claim for setoff; however, the third party will be able to sue the Partnership Firm.
What are the documents required for Partnership Firm registration in India?
Following below-mentioned documents will be required for partnership firm registration in India:
- Partnership Firm registration application in Form 1
- Certified Copy of notarized Partnership Deed on stamp paper
- Specimen of Affidavit
- Ownership documents in case property are owned.
- If the property is on rent then rental agreement as a proof of principal place of Business
- ID Proof and address proof of all the partners (PAN/ Aadhar Card/ Driving License/ Copy of voter ID/ Passport)
What is the Procedure for Registration of Partnership Firm in India?
For online registration of Partnership Firm in India, an application form is filed with the registrar of firms of the state where the firm is situated along with the prescribed fees. The partnership firm registration application form must be signed by all partners or their agents. Thereafter Partnership Deed is created on stamp paper and which should be signed by all the partners with notarization.
After verification of the prescribed documents, if the registrar is satisfied, then he will register the partnership firm in Register of Firms and issue a Certificate of Registration. Up to date information of all the firms is contained under the Register of Firms and on the payment of the certain fees it can be viewed by anybody.
What will be the Step by Step Procedure for Online Registration of Partnership Firm in India?
- Selection of Partnership Firm Name
- Creation of Partnership Deed
- Partnership Firm Registration
What are the main components of the Partnership Deed?
Below mentioned components must be considered while drafting a partnership deed:
- Detail of the firm and its partners such as name and address
- Nature of the Partnership Firm
- Detail of capital contributed by each Partner
- Profit/loss sharing ratio among the partners
- Interest on capital invested
- Detail of drawings by partners or loans provided by partners
- Salaries, commissions or any other amount to be payable to partners
- Rights and duties/obligation of each Partner
- A process which will be followed in case of retirement or death of any partner
- Other mutually decided clauses
For Partnership registration in India, partnership deed must be duly stamped and notarized. We have a team of professionals who can draft your partnership deed in a very experienced manner.
What are the Tax compliances for Partnership Firm in India?
It is mandatory for partnership firms in India to obtain Permanent Account Number and Tax Deduction Account Number from the Income Tax Department after Partnership Firm Registration.
Partnership Firm has to file a return of income irrespective of the revenue or loss. In the case of a partnership firm, the income tax rate on the total income will be 30% and surcharge on income tax.
What are the Post Partnership Firm Registration Requirements?
Once the Partnership Firm registration is completed, you have to take the necessary steps in order to make a strong place in the industry.
Bank Account Opening
First, you have to open a bank account on the name of the partnership firm within 30 days of the partnership firm registration. For bank account opening you would have to submit PAN and other documents as required by the bank.
Intellectual Property Registration
Intellectual property registration gives protection to the trademark and patent from infringement and duplication. With this, competitors cannot affect your brand and market value. The logo provides protection under the Trade Marks Act.
The growth of the firm depends upon standardized policies and procedures. The partnership firm shall set up policies and enter into certain agreements on the basis of its structure.
The next step is the printing of stationery such as billheads and letterheads, consisting of the name of the firm.
GST (Goods and Service Tax) registration is required for Business with annual turnover exceeds Rs. 40 Lakhs (Rs 20 Lakhs for Northeast states).GST registration is mandatory for particular businesses like Export-Import, E-commerce, and Market Place Aggregator.