PARTNERSHIP FIRM REGISTRATION

Partnership serves as an answer to the needs of greater capital investment, varied skills and sharing of risks. Partnership firm is ideal for small businesses that plan to remain small.

OFFER PRICE

₹3999 /- Plus Tax

Timeline - 7 Working days

WHAT IS A PARTNERSHIP FIRM ?

Partnership is a common form of business. Two or more people come together to carry on a business and share the profits and losses. Liability of the partners in a partnership firm is joint and several.

A partnership firm is not a separate legal entity distinct from its memebers. It is merely a collective name given to the individuals composing it. Hence, unlike a company which has a separate legal entity distinct from its members, a firm cannot possess property or employ servants, neither it can be a debtor or a creditor. It cannot sue or be sued by others.

  • Partnerships are governed by Indian Partnership Act, 1932. Registration of a partnership is not mandatory under the Act, but registered partnerships get to enjoy some additional benefits such as the right to sue.
  • Terms with regard to profit sharing ratio, remuneration to partners, interest on capital etc are agreed upon by the partners in the partnership deed.
  • Maximum no. of partners in a firm is 20 (10 in case of a firm carrying on banking business).
  • All the partners must share the profits of a firm in whatever ratio as may be agreed upon by them. However, sharing of losses by all partners is not mandatory.
  • Minors can be admitted as partners but to the benefit of the minor i.e., minor should not share the loss.
  • Agreement between partners in a unregistered firm can be an oral agreement too.

FEATURES

What are the Features of Partnership Firm ?

  • Existence of an agreement Partnership is the outcome of an agreement between two or more persons to carry on business. This agreement may be oral or in writing. The Partnership Act, 1932 (Section 5) clearly states that “the relation of partnership arises from contract and not from status.”
  • Existence of business Partnership is formed to carry on a business. As stated earlier, the Partnership Act, 1932 [Section 2 (6)] states that a “Business” includes every trade, occupation, and profession. Business, of course, must be lawful.
  • Sharing of Profits The purpose of partnership should be to earn profits and to share it. In the absence of any agreement, the partner should share profits (and losses as well) in equal proportions.
  • Contractual Relation The person joining the partnership enters into a contract for running the business. According to Partnership Act, the relation of partnership arises from contract and not from status. The contract may be oral or written but in practice written agreement is made because it helps to settle the disputes if they arise later on.
  • Nature of liability The nature of liability of partners is the same as in case of sole proprietorship. The liability of partners is both individual and collective. The creditors have a right to recover the firm’s debts from the private property of one or all partners, where firm’s assets are insufficient.
  • Registration of firm Registration of a partnership firm is not compulsory under the Act. The only document or even an oral agreement among partners required is the ‘partnership deed’ to bring the partnership into existence.
  • Non-transferability of interest No partner can assign or transfer his partnership share to any other person so as to make him a partner in the business without the consent of all other partners.
  • Existence of Business Partnership can only be for some kind of business. The term ‘Business’ includes any trade, profession or occupation. By business we mean all activities concerning production, distribution and rendering of services for the purpose of earning profits. If the work is related to social service, we do not call it a business and hence no partnership.
  • Unlimited Liability As in the case of a sole-trade business liability of the partners of a firm is unlimited. In case some obligation arises then not only the partnership assets but also the private property of the partners can be taken for the payment of liabilities of the firm to the third parties. The creditors can claim their dues from anyone of the partner or from all the partners. The partners are liable individually and collectively.
  • Restriction and Transfer of Share No partner can sell or transfer his share to anybody else without the consent of the other partners. In case any partner does not want to continue in the partnership, he can give a notice for dissolution of the firm.

ADVANTAGES

Advantages of Partnership Firm

  • Risk is shared amongst the partners.
  • Better management of business can be done as the number of persons managing the business are more.
  • More resources can be procured from all the partners when compared to sole proprietorship.
  • The statement of accounts of the firm need not be published and this ensures secrecy.
  • A partnership firm is easy to form. An oral or written agreement between the partners is all that is needed to start a partnership.

DISADVANTAGES

Disadvantages of Partnership Firm

  • A partnership firm cannot invite funds from public.
  • Limited liability concept does not apply in case of a partnership firm. All the partners are jointly and severally liable for the liabilities of the firm.
  • A partnership firm does not exist for an indefinite period of time. The death, insolvency or lunacy of a partner may lead to dissolution of the partnership firm.
  • A partnership firm does not have a separate legal status i.e., a firm cannot own property.
  • 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.

DOCUMENTS

What are the Documents required for Formation of Partnership Firm?

  • Affidavit Declaring intention to become partner
  • Copy of Aadhaar Card / Voter Identity
  • Copy of PAN card of the partners
  • Form No. 1 (Application for registration under Partnership Act)
  • Rental or lease agreement of the property on which the business is set

INCLUSIONS

WHATS INCLUDED IN THIS PACKAGE ?

  • Verification of Documents
  • Preparation of Partnership Deed
  • Dealing with Respective Authorities
  • Following until Certificate is allotted

PROCEDURES

What is the process for Partnership Firm Registration?

  • Draft A Partnership Deed

    A deed of partnership is required to be made out and registered under the Indian movable property Act together with other movable properties involved.

  • Fill Form 1

    This is the Prescribed Registration Form for Incorporation of a firm. It should be filled and along with documents to be submitted to ROF

  • Submission

    Submit the duly filled Form 1, stamped partnership deed and Lease agrrement to RoF(Registrar of Firms)

  • Certificate Of Registration

    After verification of all Submitted documents, RoF will issue Certificate of Registration

FAQ

Partnership is an agreement between two or more people to share the profits of a business. The business can be carried on together by all the partners or any one partner representing the others. A partnership can be for a fixed period of time or it may be limited to a specific project or it may be dissolved at will.

No. However, it is usually a good decision for partners to work out the details of the partnership and create a written agreement. If you do not, the state’s rules regarding partnerships will govern your partnership.

Digital signature is process to authenticate and validate records electronically. DSC is required for every director of the company as the Ministry of Corporate Affairs (MCA) mandates digital signature of directors on some documents.

A limited partnership must have at least one general partner. … General partners are also subject to unlimited personal liability for the debts of the business. Thegeneral partners of a limited partnership are also jointly and severably liable for the debts of the business, just like partners in a general partnership.

A partnership is a for-profit business association of two or more persons. Because the business component is defined broadly by state laws and because “persons” can include individuals, groups of individuals, companies, and corporations, partnerships are highly adaptable in form and vary in complexity.

Partnerships can be very similar to Sole Proprietorships in the sense that the business is not necessarily an independent entity; in the simplest form ofPartnership, all partners contribute capital and all are fully liable for business debts. … The Partnership Agreement is merely a way to share Sole Proprietorship.

Yes, a partnership firm can be converted into private limited company by following the procedure laid down in Companies Act 2013.

A partnership does not pay any income taxes. Instead, partnership income “passes through” the business to the partner. Each person then reports his or her share of business profits or losses on an individual federal tax return

A partnership is a business owned by two or more people. There are three different types of business partnerships:

  1. General partnership
  2. Limited partnership
  3. Limited liability partnership

No, it is not necessary. However it is often prudent to make a partnership deed to produce to the bank, income tax authorities and to clients with whom the partnership firm deals with.

Yes. A person may become a partner with another for a single adventure or undertaking.

Yes. If the number of partners is more than 20, it has to be registered as a company.

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OFFER PRICE

₹3999 /- Plus Tax

Timeline - 7 Working days

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