Registrations of Partnership Firm

Introduction

Banding up in business with someone or more persons? In India, Partnership Firm is a fool-proof and easy form of structuring your business legally. A partnership firm is governed under Indian partnership Act, 1932 and two or more persons through their own agreement put things that they share profits, responsibility and risks.

Registration is not made compulsory but a registered partnership firm is granted various legal rights and benefits and protection under the Indian law. It enables you to open a company bank account, be registered to GST, sign a contract and also implement disputes legally when it arises. One of the clever things to do to guarantee credibility and sustainability in the long run is to register the partnership.

What is the Partnership Firm Registration?

Partnership Firm Registration is a formal procedure of registering your business company under the Indian partnership act 1932. It makes the agreement between partners to be formal in terms of sharing the profit, roles, responsibilities as well as doing a business.

The business is considered to be legal when registered with Registrar of Firms. Partnership Deed is the primary regulatory document of this type of firm and formulates details and conditions concerning which partners agree.

There are two familiar categories partnership firms can be in:

• Registered Partnership Firm
• Unregistered Partnership firm

Although the latter may work, registered firm possesses more legal weight and advantages in case of some disputes or suits.

Why is Partnership Firm Registration Required?

• Legal Identity: It launches an identified business structure.
• Right to Sue: Filing lawsuits against fellow partners or third parties is available only to the registered firms.
• Access to funding: Adds more credibility to banks, investors and suppliers.
• Evidence of Business: A contract to have a partnership will be used as evidence of business existence.
• Industrial Peace: Prevents industrial conflicts with well-documented terms and condition.
• Easy Compliance: The easy compliance with the ease as compared to the private companies or LLPs.
• Income Tax Advantage: Ability to split incomes and doing tax planning through separate PAN card.

Eligibility Criteria

• At least Two Partners: There must be at least 2 people.
• Maximum Limit: 50 partners
• Indian Resident: There must be one partner, who is an Indian resident.
• Mutual agreement: Partners have to reciprocate to be in partnership and have the partnership signed with the partnership Deed.
• Age of Legal Capacity: All partners should be of the legal age, (18 years) and sound (mentally).

Documents Required

For Partners (Individual):

• PAN Card (required)
• Voter ID / Passport / Driving License / Aadhaar Card
• Passport-size photographs
• Address evidence (electricity bill, rent contract, etc.)

In case of Partnership Firm:

• Suggested name of the firm
• To provide address proof (utility bill, rent agreement and NOC of landlord)
• Signed and notarized Partnership Deed
• PAN card of the firm which is a partnership (after setting up)
• GST registration (where necessary)

Note: Each and every document should be self-attested and in the prescribed formats.

Step-by-Step Process

• Step 1: Prepare Partnership Deed – To start up, you need to draft a Partnership Deed in which the terms and conditions agreeable to the partners are stated. In this document should be listed:
  • Name of the firm and address of the registered firm
  • The names and addresses of partners all alike
  • Nature and scope of business
  • Capital investments of the partners
  • Ratio of profits and losses
  • Role, responsibilities and functions of both partners
  • Policies of resolving disputes
  • Resignation principles, retirement or dissolution of firm
• Step 2: Partnership Deed notarization – All partners should append their signatures to the deed and get the deed executed on a non-judicial stamp paper whose worth would be as per the applicable laws of the respective states. Upon execution, it should be notarized in order to give it a legal rubric.
• Step 3: Apply PAN – Having registered the partnership firm, apply to issue a Permanent Account Number (PAN) in the name of the partnership firm by use of the NSDL or UTIITSL portal. PAN is required to be compliant with taxes and bank account in the name of the firm.
• Step 4: Register with the Registrar of firms – To legally conclude the firm, one should apply to the local Registrar of Firms in the place where the firm is situated. The application should contain:
  • Filled properly Form 1 (Application of Registration)
  • A Partnership Deed shall be notarized
  • Tackle evidence of primary location of the major business of the firm
  • Original copies of all partners on identity and address
• Step 5: Registration Certificate issuance – The Registrar of Firms when he or she is successfully able to verify the application and documents will issue a Certificate of Registration. This certificate is the official recognition of partnership firm under the Indian Partnership Act, 1932.

After registering, the company is legally able to participate in business, sign contracts, open a bank account, and enjoy other privileges that the registered firms enjoy.

Timeline

• Drafting & Notarization: 1 – 2 working days
• PAN Application: 3 to 5 working days
• Registrar of Firms registration: 7 -15 working days (depends on the state)
• End to End Process Time: 7-15 working days

Charges and Prices

• Government Fees: Depends on state (typically Rs. 500 to 2000)
• Deed Stamp Duty: Depending on the capital contribution and rates specific in the state (Rs. 200 to 2 000)
• Our Services (Professional Fees): Begins at 1999 onwards (including assistance with the drafting of deeds, and documentation, and registration)
• Optional Add-ons:
  • GST Registration
  • The registration of MSME (Udyam)
  • Setting up of business bank accounts

Non Compliance Penalty

• Won’t be able to submit an action in court against a third party or a partner
• There is lack of claim to enactment of contract in legal court rooms
• Poor credit rating to banks, suppliers and customers
• Possibility of conflict with ambiguity of terms
• Audit problems and taxing problems

Therefore, it is in all ways advisable to have your company registered under the law and improved compliance.

Why Choose Us?

The consultation is essential as the basis of your business should be lawful, thus it is necessary to pick the best consultant.

At Certilize we facilitate the process of creating your business with:

• Professional Lawyers
• End-to-End Documentation
• Writing of Partnership Deed by Experts
• Registration Headache-Free in Registrar of Firms
• It offers Low Fee Packages to startups
• PAN GST MSME combo choices
• Clear prices- No additional fee
• Prompt assistance and advising

Our Partnership Firm Registration is a smooth process and we operate efficiently.