The partnership is the most common style of business structure in India which is mostly preferable amongst medium-sized businesses. A partnership firm is made by two or more partners. The partners come together to join their resources for their mutual benefits by sharing profit and loss in an exceedingly prescribed ratio.
How To Register A Partnership Online
One of the easiest ways to start a business with someone is to establish a general partnership firm. We help you with your general partnership registration in India in the following ways.
Benefits of Partnership
Following are the aspects of a partnership firm that makes it a convenient choice amongst many other business structures:
Types of Partnership Firm
Partnership firm that is registered under Registrar of Firm having the jurisdiction as per the state in which firm is registered. The firm that is registered gets the legal status and hence, gets legally recognised.
Unregistered firms get established by mere formation of partnership deed. Unregistered firms are regulated and governed as per the clause of the deed, and the rights and the responsibilities of partner’s are defined as per deed.
Partnership firms of business entities covered under the Indian Partnership Act, 1932. According to this Act, registration of partnership firms is not necessary. This means that whether to register such a company or business entity is entirely the choice of the partners. However, if partners choose not to register a partnership, they will not be able to avail the benefits available to registered partners.
The rules of partnership registration are set out in Section 58 of the Indian Partnership Act, 1932. These provisions are as follows.
Application for Registration
Partnership firms can be registered by sending an application in Form No. 1. In addition to the form, an original copy of the partnership deed along with the prescribed fee must also be sent to the Registrar. Such an application must be filed with the Registrar of Companies in the area where the business is located. the application should be designed :
- The name of the company and the nature of the business of the company
- Place or principal place of business
- Names of other places where the business is undertaken
- Date of joining of each partner
- Full names and addresses of the partners
- Duration of the firm
Further, such applications must be signed by all partners or agents who are exclusively authorized on their behalf. Also, it should be sent to the Registrar within one year from the date of formation of the partnership firm.
Verification of Application for Registration
Each partner signing such an application must also verify in the same manner as prescribed by law.
Documents needs To Be Attached To The Application for Registration
The documents along with the prescribed fee must be submitted to the Registrar. These include:
- Registration Application in Form No. 1
- Duly filed affidavit
- Certified and true copy of Partnership Deed.
- It must be noted that the Partnership Deed created by the partners must be on a stamp paper as the Indian Stamp Act. Or the Deed must be on a stamp paper that is applicable in the State in which such a Deed is implemented.
- Rental or Lease Agreement or proof of ownership of place of business
Fee for Registration
As per section 71 of the Act, the State government has no limitation to make rules regarding the fees to be given to the Registrar along with the other documents for registration.
Naming A Partnership Firm
The name of the partnership firm should consider the rules mentioned in the above section while choosing a name for the partnership firm., the firm that is registered must use brackets and the word (Registered) after its name.
In addition, if any partner is not satisfied with the order of the Registrar regarding the name of the company, he can appeal to the person authorized by the State Government on this behalf. This appeal must be made within 30 days from the date of communication of such appeal and after payment of the required fee. Upon receipt of the appeal, the competent authority will decide on the matter.
Entry of Statement in a Register
According to Section 59 of the Act, the Registrar enters a statement in the Register and files the statement. Once the registrar is satisfied that the registration application will comply with all the required regulations. The date on which the Registrar records and files statement is considered as the date of registration of the Partnership firm.
Apply For a PAN Card
It is imperative to note that registration with the Registrar of Firms is not the same as the registration with the Income Tax Department. It is mandatory for all the firms to apply for registration with the Income Tax Department and obtain a PAN Card.
Open a Bank Account
After receiving the PAN Card, the partnership firm must open a current account in the name of the firm. This is done to undertake all the operations via the current account of the business.
Checklist (Documents required)
list of documents that are needed:
- Partnership deed signed by all the partners of the firm
- Pan card of all the partners
- Address Proof of all
- Pan card of the firm separately
- Address proof of the firm. In case if the property is rented, then you need NOC from the owner.