Begin Your Partnership Firm Registration Online Today!
Just at ₹6799 (All Inclusive)
Say goodbye to delays and challenges! Choose India’s top company incorporation services provider to swiftly register your business. Subject to T&C*
Still having any queries?
Happy businesses & Clients.
Partnered banks & Government Orgs.
India Registered
Google Ratings
Customer Satisfaction Guarantee
PARTNERSHIP FIRM
WHAT IS A PARTNERSHIP FIRM (OR GENERAL PARTNERSHIP)?
In India, a partnership firm is a type of business structure where two or more individuals come together to carry on a business with a shared goal of earning profits. The partnership firm is governed by the Indian Partnership Act of 1932. The individuals who enter into the Partnership Agreement are called the Partners of the firm, and all the roles, responsibilities and the Profit-Sharing Ratio are clearly drafted in a document known as the Partnership Deed. This Partnership Deed plays a crucial role in addressing future disputes that arises between the Partners.
As per the Indian Partnership Act 1932, when two or more partners willfully come together to start a Partnership firm, they should enter into an agreement defining all the roles of the Partners in all aspects of the Business. This Agreement can be achieved orally or can be drafted into a Partnership Deed. Also, it is not mandatory as per the Act to Register your Partnership firm with the Registrar of Firms, but a registered Partnership firm enjoys several benefits in comparison to an unregistered Partnership Firm.
Taxkey encourages Business Partners who are willing to set up a Partnership Firm to Register their firm with the Registrar of Companies. All the relevant details required to register your Partnership Firm are discussed in detail in this article.
CHECK-LIST FOR REGISTRATION
DOCUMENT CHECK-LIST FOR REGISTRATION
Partnership Deed:
A partnership deed is a written agreement that contains the terms and conditions of the partnership. It should include details like the name of the firm, its address, names and addresses of partners, their Profit-Sharing Ratio (PSR), capital contribution, etc.
PAN Card:
The partners must have a PAN (Permanent Account Number) card, which is a unique identification number assigned to individuals by the Income Tax Department of India.
Address Proof:
Any document that proves the address of the partnership firm, such as a rent agreement or ownership deed.
ID Proof:
Any government-issued identity proof of the partners such as Aadhaar cards, Voter ID cards, passports, or driving licenses.
Registration Application:
A duly filled application for Partnership Firm registration must be submitted to the Registrar of Firms in the state where the firm is located.
PROCESS OF REGISTRATION
PROCESS OF REGISTRATION OF YOUR PARTNERSHIP BUSINESS
As per the Indian Partnership Act 1932, to register your Partnership Firm, you need to draft your Partnership Deed and register the Deed with the Registrar of Firms. The registration process varies depending on the state in which the partnership is being formed but generally involves submitting an application and a copy of the partnership deed to the Registrar of Firms (RoF), along with the prescribed registration fees.
Here are the general steps to register a partnership deed in India:
Prepare your Partnership Deed:
The partnership deed should contain details about the partners, the Business, the profit-sharing ratio, and other terms and conditions of the partnership.
Verification of the Deed:
The partners must sign the partnership deed in the presence of a witness.
Application for registration:
The partners should submit the application for registration of the Partnership Deed to the Registrar of Firms (RoF)in the respective state.
Payment of Registration Fee:
The partners will have to pay the prescribed registration fees to the Registrar of Firms (RoF).
Acquiring Certificate of Registration:
Upon verification of the documents and payment of fees, the RoF will register the partnership deed and issue a Certificate of Registration.
It is advisable to consult a Tax Consultant like Taxkey to guide you through the registration process and ensure compliance with all legal formalities.
PARTNERSHIP DEED
HOW TO DRAFT YOUR PARTNERSHIP DEED?
A Partnership deed is a legal document that outlines the terms and conditions of the partnership between the partners. It is an important document that defines the rights, duties, and obligations of the partners.
The following are the key things that should be considered while drafting a Partnership deed in India:
Name and address of the partnership:
The Partnership deed should contain the name (Name of the Business) and address of the partnership (Place of Business).
Nature of the Business:
The nature of the Business should be clearly defined in the Partnership deed.
Capital contribution:
The Partnership deed should specify the amount of capital that each partner will contribute towards the Business.
Profit sharing ratio:
The Partnership deed should clearly define the Profit-Sharing Ratio (PSR) among the partners.
Roles and responsibilities:
The Partnership deed should clearly define the roles and responsibilities of each partner in the Business.
Decision-making:
The Partnership deed should specify the decision-making process in the Business.
Dissolution of the partnership:
he Partnership deed should outline the process for the dissolution of the partnership.
Dispute resolution:
The Partnership deed should specify the mechanism for resolving disputes between the partners.
Admission and retirement of partners:
The Partnership deed should define the process for the admission and retirement of partners in the Business.
Duration of the partnership:
The Partnership deed should specify the duration of the partnership.
The Partnership deed should be executed by all the partners and should be registered with the Registrar of Firms. The Partnership deed can be amended or modified as required, with the consent of all the partners.
Note: A Partnership Deed should be drafted with the help of professionals like Taxkey to avoid any gaps in the document that may lead to future disputes.
BENEFITS
BENEFITS ENJOYED BY A REGISTERED PARTNERSHIP FIRM
As discussed earlier, as per the Indian Partnership Act 1932, it is not mandatory to register your Partnership Firm. But registering your Partnership Firm offers several benefits that can help in the growth and success of your Business.
Some of the benefits enjoyed by a Registered Partnership Firm are,
Legal recognition:
Registering your partnership firm with the Registrar of Firms provides legal recognition to your business entity. This means that your partnership firm becomes a separate legal entity and can enter into contracts, own property, and sue or be sued in its own name.
Better access to funding:
Registered partnership firms have access to various sources of funding, including bank loans, venture capital, and angel investors. Banks and financial institutions are more likely to lend to a registered partnership firm than an unregistered one.
Limited liability:
A registered partnership firm provides limited liability protection to its partners. This means that the personal assets of the partners are not at risk in case of business losses or legal disputes.
Tax benefits:
Registered partnership firms are eligible for tax benefits under the Income Tax Act, such as tax deductions and exemptions. Partnerships are taxed at a lower rate than companies, making it a more tax-efficient business structure.
Credibility:
A registered partnership firm has more credibility and is more likely to be trusted by customers, vendors, and other business partners. This can help in building a positive reputation and growing the Business.
Ease of management:
A registered partnership firm is easier to manage as it has a structured framework for decision-making, distribution of profits, and other business operations. This can help in avoiding disputes and conflicts among the partners.
REGISTERING YOUR PARTNERSHIP
THINGS TO DO AFTER REGISTERING YOUR PARTNERSHIP FIRM
After successfully registering your partnership firm in India, there are a few important things you need to do to ensure that your Business is legally compliant and ready to operate. Below are some of the important steps you need to take:
Obtain the PAN and TAN:
The PAN identifies your Business for tax purposes, while the TAN is required if you are planning to deduct and collect taxes on behalf of your employees or clients. You can apply for both of these numbers online through the NSDL website.
Open a bank account:
Once you have obtained the PAN and TAN for your partnership firm, you should open a separate bank account in the name of your firm. You will need to provide the bank with a copy of your partnership deed and other documents as required by the bank.
Register for GST:
Depending on the nature of your Business, you may need to obtain various licenses (like MSME, FSSAI, Trade License, Shop & Establishment License, Import-Export License etc.) and permits from the relevant government authorities.
Obtain necessary licenses and permits:
Depending on the nature of your Business, you may need to obtain various licenses (like MSME, FSSAI, Trade License, Shop & Establishment License, Import-Export License etc.) and permits from the relevant government authorities.
Maintain proper accounting records:
As a partnership firm, you will need to maintain proper accounting records, including books of accounts, invoices, receipts, and other financial documents. This will help you track your expenses, income, and taxes more efficiently and will also be useful in case of audits or legal disputes.
TAXKEY
HOW CAN TAXKEY HELP?
Taxkey can assist in registering a Partnership firm and provide the necessary compliance assistance to ensure that the firm operates in a legally compliant manner. Here’s how:
- Partnership Firm Registration: Taxkey can help you with the registration of your Partnership firm. We can guide you through the entire process, including obtaining the necessary licenses and registration certificates.
- Compliance Assistance: Once your Partnership firm is registered, Taxkey can help you with the necessary compliance requirements. This includes assisting you with obtaining a Permanent Account Number (PAN), Goods and Services Tax (GST) registration, filing of annual tax returns, and compliance with other legal requirements.
- Business Advice: Taxkey can provide legal advice to ensure that your Partnership firm operates in compliance with all applicable laws and regulations. We can assist with Business documentation, business contracts, and other requirements that may arise.
- Accounting and Bookkeeping: Taxkey can provide accounting and bookkeeping services to help you maintain accurate financial records for your Partnership firm. This can include the preparation of financial statements, ledger maintenance, and other accounting services.
At Taxkey, we understand that each Partnership firm is unique, and we offer personalized solutions that cater to your specific requirements.
How it works
Easy Step Process
We offer consulting services to businesses. Our experts help you achieve your financial goals.
Simplify your finances with TaxKey Accounting's seamless online platform. From registration to personalized financial plans, we're your trusted partner every step of the way.
Experience convenience with our streamlined delivery process. From order to doorstep, we ensure your items reach you swiftly and securely
Need more help?
Let us be your trusted Financial Advisors
Testimonials
Our Clients' Reviews
