Partnership Registration

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What is Partnership Registration ?

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. Partnership registration is relatively easy and is prevalent among small and medium sized businesses in the unorganized sectors. Partnership Registration is done through TS Associates.

For Partnership Registration, you must agree on a firm name and then establish a partnership deed. It is a document stating respective rights and obligations of the partners and to be valid it should be written and not oral. The terms of the Partnership Deed can be varied to suit the interests of the partners and can even be made contrary to the Indian Partnership Act, 1932 but if the Partnership Deed is silent on any point, then the provisions of the Act would apply.

Choose Partnership because:
 
  • Partnership registration is very easy.

  • Partnership registration is inexpensive as compared to LLP.

  • It has minimum compliance requirement.

What is Included In Our Partnership Registration Package?

    • Drafting of Partnership Deed
 
    • Name search & approval

    • TAN
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    • Partnership Pan Card

Documents Required For Partnership Registration

The following documents are required for the registration of a Partnership firm:

 
  • Statement in Form 1 with the prescribed fees
  • Notarized True copy of the Partnership Deed stating the following :
    • The firm-name
    • The nature of business of the firm
    • The place or principal place of business of the firm
    • The names of any other places where the firm carries on business
    • The date when each partner joined the firm
    • The names in full and permanent addresses of the partners
    • The duration of the firm
  • Proof of ownership or rent/lease of the location of your business.(e.g. Electricity Bill/ Water Bill or Rent/Lease/Leave and Licence Agreement of Business Place)
  • Copy of PAN Card of partners
  • Copy of Aadhaar Card/ Voter identity card
The Statement must be signed by all the partners of the firm and must also be verified by affidavit in the prescribed manner.

Need for Partnership Registration

If you don’t register your Partnership :

  • 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.
  • Cannot claim Setoff in a dispute with a third party.
  • The firm cannot sue third parties whereas the third parties would be able to sue the firm irrespective of registration.

Frequently Asked Questions

A minimum of two Persons is required to start a Partnership firm. A maximum number of 20 Partners are allowed 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.

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.

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.

An TS Associates will understand your business requirements and help you start a Partnership firm by drafting the Partnership deed. Based on the requirements, TS Associates can also help register the Partnership deed with the relevant Authorities to make the Partnership Firm a Registered Partnership firm.

Partnership firms are registered by the Registrar of Firms, under the Indian Partnership Act, 1932.

Only a registered Partnership firm can file a suit in any court against the firm or other partners for the enforcement of any right arising from a contract or right conferred by the Partnership Act. Also, only a Registered Partnership firm can claim a set off (i.e. mutual adjustment of debts owned by the disputant parties to one another) or other proceedings in a dispute with a third party. Hence, it is advisable for Partnership firms to get itself registered sooner or later.

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.

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.

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.

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.

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.