Partnership Registration

A business organization in which two or more individuals manage and operate the business. Both owners are equally and personally liable for the debts from the business. The owners of a partnership business are individually known as the "partners" and collectively as a "firm". 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. A partnership is formed by an agreement :which may be either written or oral. When the written agreement is duly stamped and registered, it is known as "Partnership Deed". Ordinarily, the rights, duties and liabilities of partners are laid down in the deed. But in the case where the deed does not specify the rights and obligations, the provisions of the THE INDIAN PARTNERSHIP ACT, 1932 will apply.

Our Packages

Unregistered Partnership Deed

1999

Start your Partnership firm with Notarized Partnership Deed

Partnership Registered with Magistate

15000

Partnership Deed plus registation Certificate from magistate

Limited Liability Partnership

8125

Includes LLP Formation Partnership Deed PAN TAN.

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Documents Required for Partnership Registration

  • 1     PAN ( Permanent Account Number) of all Partners (Minimum 2)
  • 2     Address Proof ( Voter Id, Passport, Driving License, Aadhar Card) of all partners
  • 3     Latest passport size Photographs of all partners
  • 4     Registered Office Address Proof - Electricty Bill along with Rent Agreement / ownership proof of proposed registered office.
  • 5     Copy of Mobile bill, telephone bill, electricity bill or Bank Statement of all directors / promoters with Present address (could be different from permanent address).
Process Involved 20%

Documentation

Information Required

Partnership Deed Drafting

Partnership Deed Signing

Partnership Deed Registration

PAN and TAN

STEP 1

We will need the set of documents to draft a partnership deed

STEP 2

Once Documents are received, We will need some information like salary to be paid to partners etc in a form

STEP 3

Partnership deed will be drafted and sent to client for approval

STEP 4

Approved deed will be send to client for signing

STEP 5

Signed Partnership deed will be send for Notarization and Registration

STEP 6

Permanent Account Number (PAN) is applied based on Partnership Deed after that TAN number is applied Once we receive copy of PAN card

Registration of Partnership Firm

A business organization in which two or more individuals manage and operate the business. Both owners are equally and personally liable for the debts from the business. The owners of a partnership business are individually known as the "partners" and collectively as a "firm".

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.

A partnership is formed by an agreement :which may be either written or oral. When the written agreement is duly stamped and registered, it is        known as "Partnership Deed". Ordinarily, the rights, duties and liabilities of partners are laid down in the deed. But in the case where the deed does   not  specify the rights and obligations, the provisions of the THE INDIAN PARTNERSHIP ACT, 1932 will apply.

In India, Partnership firms are of 3 Types:

1. Unregistered Partnership Deed
2. Partnership Registered with Magistate
3. Limited Liability Partnership

1. Unregistered Partnership - Rs. 1999

As per Partnership Act, 1932 Registration of Partnership is Not mandatory
Step 1 - Partnership deed is drafted and Notarized
Step 2 - PAN and TAN are applied
Step 3 - Bank account is opened to start the business

Documents required

1. Pan Card, Identity Proof, Photo & Address Proof of all Partners
2. Ownership proof of proposed registered address

2.Partnership Registered with Magistate - Rs. 9000

Here both partners have to go to Magistate, who check authenticity of Documents and Provide a registration Certificate

A partnership firm is required to be registered under sections 58 and 59 of the Partnership Act.

3. Limited Liability Partnership-Rs.7990 

It is best form of Partnership, it constitute Limited Liability and registration with Ministry of Corporate Affairs

Advantages

  • Low cost of Formation and compliances and less statutory compliances as compared to Private limited Companies
  • Better decision making and control over the business.

Disadvantage

  • A partnership usually has limitations that keep it from becoming a large business.
  • Unlimited liability. General partners are liable without limit for all debts contracted and errors made by the partnership.
  • Since decisions are collective ,disagreements can occur.

Tax Benefits of Forming a General Partnership

General partnerships do not pay income tax. However, the owners or partners of a general partnership do. As with sole proprietorships and limited liability companies, partnerships are pass-through tax entities. This means the profits and losses of a partnership trickle down to the business' owners, who must declare their share of the business' income on their personal tax returns. Partnerships do not have to calculate or pay estimated taxes.

Taxation of partnership

Tax will be payable at a flat rate of 30% plus 3% Education cess & Secondary and Higher Education cess on the total of income tax and surcharge.

Surcharge has been eliminated AY 2011-12 onwards.

The deed, generally contains the following particulars:-

  1. Name of the firm.
  2. Nature of the business to be carried out.
  3. Names of the partners.
  4. The town and the place where business will be carried on.
  5. The amount of capital to be contributed by each partner.
  6. Loans and advances by partners and the interest payable on them.
  7. The amount of drawings by each partner and the rate of interest allowed thereon.
  8. Duties and powers of each partner.
  9. Any other terms and conditions to run the business.

FAQ

A minimum of two Persons is required to start a Partnership firm. A maximum number of 20 Partners are allowed in a Partnership firm..
PAN Card for the Partners along with identity and address proof is required. It is recommended to draft a Partnership deed and have it signed by all the Partners in the firm..
MyCorporation Associate will understand your business requirements and help you start a Partnership firm by drafting the Partnership deed. Based on the requirements, MyCorporation can also help register the Partnership deed with the relevant Authorities to make the Partnership Firm a Registered Partnership firm..
No, a Partnership firm has no separate legal existence of its own i.e., the Partnership firm and the partners are one and the same in the eyes of law. Liability of the Partners is also unlimited, and the partners are said to be jointly and severally liable for the liabilities of the firm. This means that if the assets and property of the firm is insufficient to meet the debts of the firm, the creditors can recover their loans from the personal property of the individual partners..
Partnership firms are business entity that are owned, managed and controlled by one person. So Partners cannot be inducted into a Partnership firm..
Indian Nationals and Indian Residents are allowed to invest in a Partnership firm without any approval. Usually those who invest in the Partnership firm become a Partner of the firm and in the absence of any agreement to the contrary, all partners will have a right to participate in the activities of the business..
It is not necessary for Partnerships to prepare audited financial statements each year. However, a tax audit may be necessary based on turnover and other criterion. .

 

The Partner must be an Indian citizen and a Resident of India. Non-Resident Indians and Persons of Indian Origin can only invest in a Proprietorship with prior approval of the Government of India..
There is no limit on the minimum capital for starting a Partnership firm. Therefore, a Partnership firm can be started with any amount of minimum capital..
To open a bank account for a Partnership firm, a registered Partnership deed along with identity and address proof of the Partners need to be provided..
If the Partnership firm is registered, the Partnership deed will be registered and a Registration Certificate will be issued by the Registrar of Firms..
There are restrictions on the transfer of ownership interest in a Partnership firm. A Partner cannot transfer his/her interest in the firm to any person (except to the existing partners) without the unanimous consent of all other partners..
Partnership firm will have to file their annual tax return with the Income Tax Department. Other tax filings like service tax filing or VAT/CST filing may be necessary from time to time, based on the business activity performed. However, annual report or accounts need not be filed with the Ministry or Corporate Affairs, which is required for Limited Liability Partnerships and Companies. .
Yes, there are procedures for converting a Partnership business into a Company or a LLP at a later date. However, the procedures to convert a Partnership firm into a Company or LLP are cumbersome, expensive and time-consuming. Therefore, it is wise for many entrepreneurs to consider and start a LLP or Company instead of a Partnership firm..