Have you ever considered starting a partnership business and wondered how to go about it? Well, a partnership firm is a for-profit company formed by two or more partners. There are advantages to forming a partnership firm. A partnership deed is a legal document used to establish a partnership company registration.
Partnership Registration
The primary governing partnership registration law in India is the Indian Partnership Registration Act of 1932. A partnership, as defined by the law, is a group of people who have agreed to split the profits of a company for which they all, or any of them, work in the banking industry. A partnership can only have a maximum of 10 members, whereas other businesses can have up to 20 members.
Applicability of Partnership firm
Partnership firms are not separate legal entities from their partners, and a partnership company cannot be a debtor, creditor, or property owner. The partners own the assets, liabilities, and credit of a partnership registration firm, according to the law. To avoid future misunderstandings, a partnership agreement is created which specifies how profits and losses will be shared among the partners. Each partner has the authority to transact business on behalf of the others.
It makes sense for some businesses, such as home-based ones that are unlikely to go into debt, to register as partnership firms because of the low costs, ease of setup, and lack of stringent compliance requirements. A registration process for general partnerships is optional. Contact our Vakilsearch experts right away to draft a current original partnership deed registration format. The partnership company registration will be dissolved if there are fewer than two partners after a partner’s death, incapacity, or resignation.
Relevance of Partnership Registration
According to the Indian Partnership Act, registering a partnership is neither necessary nor desirable. It is optional and at the discretion of the partners. The firm may be registered as a partnership at the time of its formation, incorporation, or ongoing operation. However, it is always recommended by experts that you register a civil partnership because registered firms are entitled to several unique rights and advantages over unregistered ones.
A partner may sue any other partner or the partnership itself to enforce his contractual rights against a partner or the firm. Partners cannot sue their fellow partners or an unregistered partnership company registered in India to enforce their rights.
The registered corporation may sue any third party to enforce a contractual right. A non-registered business cannot sue someone else to enforce its rights. To enforce a contractual right, the registered business may use set-off or other legal actions.
How to register a partnership firm?
The application form and required fees must be submitted to the Registrar of Firms in the state where the company is located. The registration application must be signed and verified by all partners or their representatives.
A partnership firm can be known by any name. However, ensure that they follow the rules—for example, no two names should be the same, nothing related to the government, and so on.
If the Registrar is satisfied with the registration application and supporting documentation, the firm will be registered in the Register of Firms and given the Registration Certificate. The most recent information on all firms is available in the Register of Firms, which anyone can access for a fee.
- Application of Form-1 for registration under the Partnership Act
- Original copy of partnership deed, signed by all partners
- Rental or Lease Agreement of property/campus where the business is set
- Affidavit declaring the intention to become a partner
Documents Required for the Formation of a Partnership Firm
- Application form (Form 1)
- Specimen of the affidavit, duly filled
- A certified true copy of the partnership deed
- PAN cards of all the partners (as identity proof)
- Aadhaar card/voter ID card/ passport/driving license of all the partners
- PAN card in the name of the business
- GST registration certificate in the name of the business
- Rent agreement (in case of rented premises) and utility bill of the registered office space. In the case of rented premises, an NoC from the landlord is also required
- Details of the current bank account in the name of the business.
The Registrar of Firms (RoF) of the relevant state government is the authority in charge of the registration process. You must submit the application form (signed by all partners), the above-mentioned documents, and the required fee to the Registrar’s Office.
The application and supporting documents would be reviewed by the Registrar. When the authority is satisfied, it will approve the registration and issue the registration certificate. It will then be sent to the company’s official email address. Your company will be able to enjoy all of the benefits of a registered partnership firm as of the date of registration.
