Partnership Registration
Partnership Firm
A partnership firm is a business structure where two or more individuals come together to conduct business with a common goal of generating profits. In a partnership, the partners contribute capital, share the responsibilities of management, and divide the profits and losses according to the terms outlined in the partnership deed. This structure allows for a combination of resources and skills, providing the firm with the ability to manage risk and expand operations. Partnerships can vary in terms of size and scope, ranging from small local businesses to larger enterprises, depending on the partners' objectives and the industry in which they operate. The partnership firm offers flexibility in its operation and is governed by the Indian Partnership Act, 1932, which outlines the rights, duties, and liabilities of the partners.
Partnership Firm Business Startup Flow
- Preparation of Partnership Deed
Documents required to Prepare a partnership deed
1.Stamp Paper for Rs.1000 in the Proposed name of Partnership Firm (the Tamil Nadu government has officially increased the stamp duty for various legal instruments, including Partnership Deeds from 300 to Rs.1000. This change was enacted through the Indian Stamp (Tamil Nadu Amendment) Act, 2023 (TN Act 13 of 2024), which came into effect on May 3, 2024)
2.For Seal (Stamp in any form ie Rubber Stamp, Self-Inking Stamps etc.)
3.All partner's self attested copies of both
1. Address Proof (Aadhar Card)
2. Id Proofs (PAN Card)
4.Rental agreement - if rented premises (NOC if - own premises)
5.Recent EB Invoice / Property Tax Receipt of the Business Premises
6.Address and ID proof of both the witnesses
2. Registration of Partnership Deed with Registrar
An application form along with fees is to be submitted to Registrar of Firms of the State in which firm is situated. The application has to be signed by all partners or their agents.
Documents to be submitted to Registrar are
Application for registration of partnership (Form 1)
Specimen of Affidavit
Certified original copy of Partnership Deed
Proof of principal place of business (ownership documents or rental/lease agreement)
Practising CA/CMA/CS/Advocate should Witness the Application
If the registrar is satisfied with the documents, he will register the firm in Register of Firms and issue Certificate of Registration.
Register of Firms contains up-to-date information on all firms and can be viewed by anybody upon payment of certain fees.
Note: In case the original partnership deed was executed before 3rd May 2024 with a stamp duty of Rs. 300, but not registered by 3rd May 2024, the deed must be re-executed on stamp paper worth Rs. 1,000. The execution date of the agreement can be considered as the date when the original partnership deed was created.
3. Application for Firm PAN
Partners need to apply for PAN of the firm. Form 49A has to be filed to apply for a PAN. It shall be filled online by visiting https://www.onlineservices.nsdl.com/paam/endUserRegisterContact.html
It can be filed online if the authorised partner signs the application using a digital signature certificate. Else, the application and requisite documents have to be sent to the nearest PAN processing centers available across the country.
Address Proof of firm – If the registered office place is rented, rent agreement and one utility bill (electricity bill, water bill, property tax bill, gas receipt etc.) have to be submitted. Also, NOC from landlord will be submitted.
If the registered office place is own, utility bill has to be submitted mentioning the name of the owner. Also, a NOC from the owner (owner as mentioned in utility bill) has to be submitted.
4. Application for GSTIN under CGST act 2017
For obtaining a GST registration, a firm needs to submit PAN number, address proof and identity & address proofs of the partners. Authorized signatory will sign the application either using a digital signature certificate or E-Aadhar verification.
Click here to know the required documents : Documents Required
5. Application for MSME (Udyog/Udyam registration)
MSME Registration is an additional proof of business
Click here for - Benefits of MSME
Click here for - Apply MSME
6. Openning a Business/Current Account
Using above all documents
1.Registration Certificate
2.Partnership Deed
3.All Partners - Address and ID Proof
4.GST Registration Certificate
5.MSME Certificate
6.Photo of All Partners - 2
7.Stamp (For Seal, either rubber stamp or in any form)
7. Other Suggestions
Trademark Registration :
Getting trademark registered has a number of business benefits such as
Register your brand to get exclusive right on it.
Protect your brand like other assets and belongings of your company.
It will help you to protect your hard earn goodwill in business.
You can stop others from promoting same brand in same industry of business.
It will give you nation-wide protection for your trade.
Cost may up to Rs.12,000.00/- (Excluding Gvt penalty for providing false information and duplication of Trademark)
Click here for - More Details
Ease of Formation
Registration is not compulsory in the case of Partnership firm. It can be formed without any legal formality and expenses. Thus, it is simple and economical to form and operate
Larger Resources
Due to the more number of members, the partnership firm has larger resources for the business operations as compared to sole proprietorship
Better Management
Business of a partnership firm is very well managed by all the partners as they take interest in the daily affairs of business because of the ownership, profit and control.
Sharing of Risk
In partnership, every partner bears the risks individually as it is easier compared to sole proprietorship.
Lesser Compliances Lesser
Partnership firm are not required to file annual accounts with the registrar unlike LLP or a company.
Flexibility in Operations
Due to the limited number of partners, there is flexibility in the operations of business as the partners can amend any objectives or change any operations any time by mutual consent.
Frequently Asked Questions
Is it mandatory to register a Partnership Firm?
It is not mandatory to register a partnership firm as per the provisions of the Partnership Act, 1932. However, it is better to register a partnership firm. If the firm is not registered it cannot avail any legal benefits provided to the firm under the Partnership Act, 1932.
What are the legal benefits provided for the registered partnership firm?
The registered firm or its partners can file a case against third party on breach of a contract. If the firm is unregistered, the partnership firm cannot file a case against the third party but the third party can file a case against the firm. Also in the case of a dispute with a third party, the unregistered firm or any of its partners cannot claim a set off.
How much time does it take to register a partnership?
The registration of the Partnership Firm in India can take up to approx 10 working days. However, the time taken to issue the Certificate of registration may vary as per the regulations of the concerned state. The registration of Partnership Firm is subject to Government processing time which varies for each State.
Can the Certificate of Registration be revoked?
In a certain sense, a partnership certification of incorporation can be revoked, at the time of dissolution. A dissolution can be brought upon automatically when all partners or all partners except one partner are declared insolvent or if the firm is carrying unlawful activities.
When should the partners apply for registration of the partnership firm?
A partnership firm can be registered at the time of its formation or even subsequently at any stage. However, it is advisable to get the firm registered as soon as it starts its business for availing the rights that can be enjoyed only by a registered firm.
Can a firm be given any name?
Except names like Crown, Emperor, Empress, Imperial, King, Q ueen Royal pr any name signifying authority of Government any name may be given (See Sec.58 of Indian Partnership Act 1932).