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.
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
Registration of Partnership Firm
A Partnership is a business structure in which two or more individuals manage and operate a business in accordance with the terms and goals set out in the PartnershipDeed.
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.
Choose Partnership because
- Partnership registration is very easy.
- Partnership registration is inexpensive as compared to LLP.
- It has minimum compliance requirement.
Need for Partnership Registeration?
If you don’t register your Partnership:
1. Partner Cannot sue firm: A partner in an unregistered partnership firm cannot sue the firm for enforcing any rights under the Indian Partnership Act, 1932.
2. Cannot claim Setoff in a dispute with a third party.
3.The firm cannot sue third parties whereas the third parties would be able to sue the firm irrespective of registration.
In India, Partnership firms are of 3 Types:
| Unregistered Partnership Deed | Partnership Registered with Magistrate | Limited Liability Partnership |
- Low cost of Formation and compliances and less statutory compliances as compared to Private limited Companies
- Better decision making and control over the business.
- 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.
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.
Particulars of the Deed
- The Name of the firm.
- The Nature of the business to be carried out.
- The Names of the partners with their Address.
- The place or principal place of business of the firm
- The names of any other places where the firm carries on business
- The amount of capital to be contributed by each partner.
- The Loans and advances by partners and the interest payable on them.
- The amount of drawings by each partner and the rate of interest allowed thereon.
- The Duties and powers of each partner.
- The duration of the firm
- Any other terms and conditions as required by partners to run the firm.
FAQs
FAQs
What are the requirements to be a Partner in a Partnership firm?
What are the documents required to start a Partnership firm?
What is the capital required to start a Partnership firm?
How will MyCorporation help me start a Partnership firm?
How to open a bank account for a Partnership firm?
Will my Partnership firm have a separate legal identity?
Will my Partnership firm have a Certificate or Incorporation or Registration?
How to register the name of a Partnership firm?
How can I transfer my Partnership firm?
Can other people invest in a Partnership firm?
What are the annual compliance requirements for a Partnership?
Is audit required for a Partnership firm?
Can I later convert my Partnership firm into a Company or LLP?
In which cities does MyCorporation provide partnership registration?
I can answer any questions you have about starting a business or taxation or funding. You can click on the questions to the left or write your question below
I can answer any questions you have about starting a business or taxation or funding. You can click on the questions to the left or write your question below
FAQs
How many people are required to start a Partnership firm?
A minimum of two Persons is required to start a Partnership firm. A maximum number of 20 Partners are allowed in a Partnership firm.What are the requirements to be a Partner in a Partnership firm?
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.What are the documents required to start 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.What is the capital required to start a Partnership firm?
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.How will MyCorporation help me start a Partnership 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.How to open a bank account for a Partnership firm?
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.Will my Partnership firm have a separate legal identity?
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.Will my Partnership firm have a Certificate or Incorporation or Registration?
If the Partnership firm is registered, the Partnership deed will be registered and a Registration Certificate will be issued by the Registrar of Firms.How to register the name of a Partnership firm?
Partnership firms are business entity that are owned, managed and controlled by one person. So Partners cannot be inducted into a Partnership firm.How can I transfer my Partnership firm?
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.Can other people invest in 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.What are the annual compliance requirements for a Partnership?
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.Is audit required for a Partnership firm?
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.Can I later convert my Partnership firm into a Company or LLP?
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.In which cities does MyCorporation provide partnership registration?
MyCorporation provides partnership deed services across India in all cities. We have done partnership registration in Mumbai, Delhi, Gurgaon, Noida, Bangalore, Chennai, Hyderabad, Ahmedabad, Kolkata, Surat, Pune, Jaipur, Lucknow, Kanpur, Nagpur and other Indian cities.- Import Export Code IEC
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Unregistered Partnership Deed
1999
Partnership Registered with Magistrate
15000
Limited Liability Partnership
8341
Package Includes
Start your Partnership firm with Notarized Partnership Deed
Package Includes
Partnership Deed plus registation Certificate from magistate
Package Includes
Includes LLP Formation Partnership Deed PAN TAN.