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Tax Online CA
Introduction

What is Partnership Registration?

A Partnership Firm is a legal entity created and governed by the Indian Partnership Act of 1932. A “Partnership” is defined in the Act as a relationship between two or more individuals who have agreed to share the profits and liabilities of a business. These people are known as “partners,” and the firm they run in “Partnership” with one another is known as a Partnership Firm.

A Registered Partnership Deed serves as the foundation for the formation of a Partnership Firm. It is an agreement in writing that contains all of the terms and conditions that the partners have mutually agreed upon. The existence of the Partnership deed is required for the Firm to exist. In other words, if the deed fails to exist for whatever reason, the Partnership Firm will be dissolved immediately.

Documents Required for Partnership Registration

  1. Self attested copy of Pan Card
  2. Self attested copy of Adhar Card
  3. Photograph of Applicant
  4. Cancel cheque of Proprietor
  1. Electricity Bill, Property tax receipt, Sale Deed, Rent Agreement
  2. NOC from Owner of Premises
  3. Property Owner Pan card and adhaar card 
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Minimum Person

A minimum of two partners is required to start a Partnership Firm. The maximum number of partners allowed for a partnership firm in India is twenty partners. However, no foreigner is allowed as partners in the partnership firm.

Unique Name of Firm

You should select the name of the partnership firm that is unique & which reflects the main business activity. Ensure that the proposed name is not the same or similar to any existing business or trademark registered or applied.

Capital Requirement

There is no minimum or maximum capital prescribed under the Partnership Act 1932. You can keep the capital of the firm as per the business requirements. The stamp duty on the deed depends on the capital and the state.

Business Address

Address at which the firm carries on its usual business or maintains its books of account is known as its Principal Place of Business. The latest proof of the place of business along with a NOC from the premises owner is required.

Benefits of a Partnership Registration

Minimum Compliance

For general partnerships, there is no need for an auditor to be appointed or, if the company is still in the process of registration or is still unregistered, annual accounts filing with the registrar is not necessary either. Annual compliances are also lower when compared to an LLP.

Simple To Begin

A general partnership can be formed within 2-4 business days, with an unregistered deed of partnership. However, registering for the event offers its own set of benefits.

Comparatively Economical

A general partnership is substantially less expensive to start than an LLP. It will still be cost effective in the long term because the compliance needs are minor.

Partnership Registration Process

Step Description
Step 1: Choose a name for your partnership firm The first step in partnership firm registration is to choose a unique name for your firm. The name should not be the same as an existing partnership firm or company, and it should not violate any trademarks or copyrights.
Step 2: Prepare a partnership deed The next step is to prepare a partnership deed, which outlines the terms and conditions of the partnership. The partnership deed should include the following details:
  • Name and address of the partnership firm
  • Name and address of all partners
  • Nature of the business
  • Capital contribution of each partner
  • Profit-sharing ratio among partners
  • Responsibilities and duties of each partner
  • Dissolution and retirement terms
Step 3: Obtain a PAN card Partnership firms need to obtain a PAN (Permanent Account Number) card from the Income Tax Department. The PAN card is used for tax purposes and is required for opening a bank account and obtaining other necessary licenses.
Step 4: Register for GST If the partnership firm’s annual turnover is more than Rs. 20 lakhs, it is mandatory to register for GST (Goods and Services Tax). GST registration is done online, and the partnership firm will receive a GSTIN (Goods and Services Tax Identification Number) after successful registration.
Step 5: Obtain other necessary licenses Depending on the nature of the business, the partnership firm may need to obtain other necessary licenses and permits, such as a trade license, shop and establishment license, or a professional tax registration.
Step 6: Register your partnership firm Once you have completed all the above steps, you can register your partnership firm with the Registrar of Firms in your state. To register your partnership firm, you need to submit the following documents:
  • Partnership deed
  • Address proof of the partnership firm
  • Address proof of all partners
  • PAN card of the partnership firm
  • PAN card of all partners
  • Registration fee
After submitting the documents, the Registrar of Firms will verify the documents and issue a Certificate of Registration. The partnership firm is now legally registered, and you can start your business operations.
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