DOCUMENTS

The documents required for partnership firm registration in India are as follows:

• Partnership Deed: The partnership deed is a legal document that outlines the terms and conditions of the partnership, including the nature of the business, profit-sharing ratio, capital contributions, and the rights and responsibilities of each partner.

• PAN Card: The partners must provide their PAN cards, which are issued by the Income Tax Department, to register the partnership firm.

• Address Proof: The partners must provide address proof such as Aadhaar Card, Voter ID card, Passport, Driving License, or any other government-issued document.

• Identity Proof: The partners must provide identity proof such as Aadhaar Card, Voter ID card, Passport, Driving License, or any other government-issued document.

• Rental Agreement or Property Documents: If the partnership firm is located in a rented premises, then the partners must provide a rental agreement. If the firm owns the premises, then property documents such as sale deed or property tax receipt must be provided.

• NOC from the landlord: If the partnership firm is located in a rented premises, then the partners must obtain a No Objection Certificate (NOC) from the landlord allowing them to use the premises for commercial purposes.

• Bank Account Proof: The partners must provide a bank account statement or a cancelled cheque to prove that they have a bank account in the name of the partnership firm.

• Photographs: The partners must provide passport-sized photographs for the registration process.

It is important to note that the above-mentioned documents may vary depending on the state in which the partnership firm is being registered.

PROCEDURE

The complete procedure of partnership firm registration in India is as follows:

Step 1: Choose a Name for the Partnership Firm

The partners must choose a unique and suitable name for the partnership firm that is not already in use by any other business entity.

Step 2: Create a Partnership Deed

The partners must create a partnership deed that outlines the terms and conditions of the partnership, including the nature of the business, profit-sharing ratio, capital contributions, and the rights and responsibilities of each partner.

Step 3: Obtain PAN Cards and Address Proof

The partners must obtain PAN cards and address proof such as Aadhaar Card, Voter ID card, Passport, Driving License, or any other government-issued document.

Step 4: Obtain NOC from Landlord (if applicable)

If the partnership firm is located in a rented premises, then the partners must obtain a No Objection Certificate (NOC) from the landlord allowing them to use the premises for commercial purposes.

Step 5: Register for GST (if applicable)

If the partnership firm's annual turnover is expected to exceed Rs. 20 lakhs, then it is mandatory to register for Goods and Services Tax (GST).

Step 6: Prepare and File the Application for Partnership Firm Registration

The partners must prepare the application for partnership firm registration, which includes the partnership deed, PAN cards, address proof, NOC from landlord (if applicable), and bank account proof.

Step 7: Pay the Required Fees

The partners must pay the required fees for partnership firm registration.

Step 8: Obtain the Certificate of Registration

Once the application is submitted, the Registrar of Firms will verify the documents and issue the Certificate of Registration, which confirms that the partnership firm is legally registered and can commence its business operations.

Step 9: Obtain other Required Licenses and Permits (if applicable)

Depending on the nature of the business, the partnership firm may require other licenses and permits such as trade license, professional tax registration, and shop and establishment registration.

In summary, the process of partnership firm registration involves choosing a name, creating a partnership deed, obtaining PAN cards and address proof, obtaining NOC from landlord (if applicable), registering for GST (if applicable), preparing and filing the application, paying the required fees, obtaining the Certificate of Registration, and obtaining other required licenses and permits (if applicable).

FEATURES

• Minimum members – Minimum Number of partners are two and the maximum limit is up to ten in case of banking business and twenty for all other categories of business.
• Partnership agreement – A Partnership deed is signed between all the partners entering into the partnership business, which is a written contract having a contractual relationship between the partners.
• Competent – All the partners should be competent to enter into the partnership agreement and not be a minor in age or intellectually.
• Sharing – The profit and losses are to be shared per the ratio as agreed between the partners or equally if nothing is specified.
• Unlimited Liability and business continuity – Unlimited liability of the partners and no distinct legal status separate from the partners, having no perpetual succession prevails in partnership firm.

Partnership deed

This is an agreement between the partners who have entered into the partnership which lays all the rights, duties, profit and loss sharing ratio and all other obligations of the partners.

Partnership deed can either be written or oral as per the choice of the partners, however, it is always advisable the contractual relationship is established in writing to avoid any future conflicts or litigations.

The deed contains the general and specific details. Some are stated below:

• Name and address of all the partners
• Nature of the business firm
• Capital contributed by each partner
• Profit and loss sharing ration as agreed upon
• Date of starting the business firm
• Duties, rights, obligations of each partner
• Other clauses as required by partners on mutual consent

Timeline for Partnership Firm Registration:

The Partnership registration firm process usually takes up to 2 weeks or so. However, the situation may vary from state-to-state Registrar depending on the requirement of the concerned regulation applicable.

Advantages and Disadvantages of Partnership Firm:

Importance of Partnership Firm Registration:

Though the registration of partnership firm is not compulsory under the Act, it is advisable to register due to its importance and benefits such as:

1. If any issue arises, the partner can sue other partners or partnership firm enforcing its rights per the contract against the parties. If the Partnership Firm is unregistered then partners cannot sue against the firm or other partners in any situation enforcing the rights.
2. The partnership firm which is registered can file a suit against any third party enforcing its rights per the contract, which if unregistered cannot be done.
3. The partnership firm which is registered can claim set-off and other related proceedings, wherein the unregistered partnership firm will not have this benefit to enforce the rights.

Bonus Points: The registration of partnership can be revoked in future on happening of certain situation known as ‘dissolution’. Dissolution is brought upon when all the partners of the firm except one is declared insolvent or the partnership firm is carrying on unlawful business activities. Also, any kind of loss or injury which is caused to any third party, or a penalty levied during the course of business, all the partners of the firm will be held liable even where the injury or loss which happened was due to any one of the partners. For all your queries, feel free to connect at info@ccoffice.in or 9988424211.