Partnership Firm Registration

A Partnership Firm is a popular form of business constitution for businesses that are owned, managed and controlled by an Association of People for profit. Partnership firms are relatively easy to start are is prevalent amongst small and medium sized businesses in the unorganized sectors. With the introduction of Limited Liability Partnerships in India, Partnership Firms are fast losing their prevalence due to the added advantages offered by a Limited Liability Partnership.

There are two types of Partnership firms, registered and un-registered Partnership firm. It is not compulsory to register a Partnership firm; however, it is advisable to register a Partnership firm due to the added advantages. Partnership firms are created by drafting a Partnership deed amongst the Partners and we can help start a registered or un-registered Partnership firm in India.

Documents Required for Partnership Registration

• Partnership Deed
• Documents of Firm
• Documents of Partners
• Additional Documents in case of Registration
• GST Registration
• Current Bank Account

How should be the agreement between partners formed?

Partnership deed is an agreement between the partners in which rights, duties, profits shares and other obligations of each partner is mentioned.

Partnership deed can be written or oral, although it is always advisable to write a partnership deed to avoid any conflicts in the future.

Following details are required in a partnership deed:

• Name and address of the firm and all the partners
• Nature of business
• Date of starting of business Capital to be contributed by each partner
• Capital to be contributed by each partner
• Profit/loss sharing ratio among the partners

B.Specific Details:

• Apart from these, certain specific clauses may also be mentioned to avoid any conflict at a later stage:
• Interest on capital invested, drawings by partners or any loans provided by partners to firm
• Salaries, commissions or any other amount to be payable to partners
• Rights of each partner, including additional rights to be enjoyed by the active partners
• Duties and obligations of all partners
• Adjustments or processes to be followed on account of retirement or death of a partner or dissolution of firm.
• Other clauses as partners may decide by mutual discussion

Is it necessary to register a partnership firm?

Indian Partnership Act, 1932 governs the partnerships. Registration of partnership firm is optional and at the discretion of the partners.

Registration of partnership firm may be done at any time – before starting a business or anytime during the continuation of partnership.

It is always advisable to register the firm since a registered firms enjoy special rights which aren’t available to the unregistered firms.