What is Partnership Registration?
A Partnership is one of the Forms of business structure in which two or more individuals manage and operate their business in accordance with the terms and goals set out in the Partnership Deed. Partnership registration is relatively easy and is prevalent among small and medium sized businesses in the unorganized sectors.
Partnership Firm is easy to set up as there is no need for registration. Signing on the partnership agreement alone is more than enough. All kinds of debts and legal issues are required to be resolved by the partners of the firm. A partnership firm is of two types: Registered and Unregistered. Only a maximum of 20 members is allowed to be partners.
Why go for a Partnership Firm?
1. Minimum 2 Persons are Required to Set up a Partnership
2. Low cost in Setting Up a Partnership Firm
3. Less compliance Requirements as compared to any other Form of Business
4. Shared Responsibilities and Duties Between Partners
Rietway Consultants Partnership Package
The Services which are included in our package are as Follows:
✅ Drafting of Partnership Deed
✅ Pan of Partnership
✅ Tan of Partnership
✅GST Registration
✅CA Certificate
Documents required for Partnership Firm Registration
1. Name & Nature of Firm
2. Pan Card, Adhar Card & Photo of Partners
3.Objectives of Firm
4.Electricity Bill & Rent agreement of Firm
Features of Partnership Firm:
1. Minimum 2 Person: Minimum 2 Person are Required to Form a Partnership Business. However, maximum 20 partners are allowed in a firm (10 in banking business).
2. No Minimum Capital Requirement: There is no Minimum Capital Requirement in Partnership Business.
3. NO Foreign Direct Investment: No FDI is allowed in case of Partnership Business. only Indian citizen can become the partner and start the partnership firm.
4. Unique Name: Name of the firm should be unique, and it must not same or similar to the name of any existing trademark which is registered or applied.
Process of Partnership Registration:
1. Documents: The First Step is collecting Documents of all the partners and the place of business where from where the firm shall be operating its business in India.
2. Selection of Name: The name of the partnership firm should be cross-checked with the trademark registry to avoid any infringement of someone else Trademark or any brand name.
3. Drafting of Partnership Deed - The Partnership Agreement or the Deed is the main charter document of the firm and is also considered as the constitution of the firm which determines the mutual rights of the partners among themselves
4. Stamp Duty of Partnership Deed: After the draft partnership agreement is approved and adopted by the parties the stamp duty on the partnership deed has to be paid which varies from state to state and on the capital of the partnership agreement.
5. Signing of Partnership Deed: The partnership deed is signed by the partners in the presence of two witnesses and thereafter the deed should be notarised by presenting the same before a notary public.
6. Pan and Tan Allotment: The partnership firm needs to make an application in the prescribed form before the income tax department for the allotment of PAN and Tan
Difference between LLP & Partnership
Authority: LLPs are registered in India under the Ministry of Corporate Affairs, Central Government. Partnership firms are registered with the Registrar of Firms, controlled by the respective State Government in which the firm is registered.
Limited Liability Protection: The main advantage of a Limited Liability Partnership over a traditional partnership firm is that in an LLP, one partner is not responsible or liable for another partner's misconduct or negligence. An LLP also provides limited liability protection for the owners from the debts of the LLP. However, unlike private limited company shareholder, the partners of an LLP have the right to manage the business directly.
Number of Partners: LLPs and Partnership Firms must have a minimum of two partners to be registered. Post incorporation, an LLP can have unlimited partners. In case of a Partnership Firm, if the number of partners at any time reduces below the mandatory minimum of 2 due to death, incapacitation or resignation of a Partner, the partnership firm would stand dissolved. On the other hand, in case of an LLP, if the number of Partners reduces below 2, the sole Partner can still find a new Partner to fill the position without dissolution of the LLP.
To start a partnership firm, the minimum number of partners is two, whereas the maximum number of partners can be 20. The partners must come together to carry on any legal business with the motive of earning profits.
Unlike Limited Company or LLP, there is no need to file the annual return for a partnership firm. However, income Tax Return shall be necessary to be submitted at the end of the financial year and within Due Date of filing. There is no provision of audit under the partnership, Act hence a firm does not require to get its books audited. However, if the turnover crosses 2 Crore, then tax audit is mandatory.
No, it is not Mandatory to Register a Partnership Business, but it is advised to get it done for legal Purpose.
The registration of Partnership Firm in India can take up to 12 to 14 working days. However, the time taken to issue a certificate of incorporation 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.
Often, if the partnership agreement is not registered, the court may deem a partnership invalid. If the object of the business is illegal, the court may consider the partnership invalid and dissolve the partnership.
If the partners of a firm wish to end the partnership, they can do so by dissolving the partnership by notice, if it is a partnership of will. A partnership can be dissolved in accordance with the terms laid out in the Partnership Deed, or they can do so creating a separate agreement.
Every partner is jointly liable with all the other partners and also individually, for all acts/activities of the firm, during the course of business while he/she is a partner. This means that if a loss or injury is caused to any third party or a penalty is levied during the course of business all partners will be held liable even if the injury or loss was caused by one of the partners.
Business Registration
