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PARTNERSHIP FIRM

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Partnership Firm

A Partnership Firm is a business structure that are owned, managed and controlled by a Group of People for profit.Partnership firms are comparatively easy to start and is favorable amongst small and medium sized businesses in the unorganized sectors.These are majorly of two types which is registered and un-registered Partnership firm. Registration is not mandatory but comes with added advantages. Section 69 of the Partnership Act, 1932 specifies the effect of Non-Registration i.e an unregistered firm shall not be able to recover any sum more than Rs. 100. Hence, it is strongly advisable to register the partnership with the Registrar of Firms (ROF).

For this registration, the initial step is to decide a name and then enter into an agreement which is popularly known as Partnership Deed. The Partnership deed is a document which contains respective rights and obligations of the partners.The terms & condition of the Partnership Deed can be varied according to the interests of the partners and can even be made contrary to the Indian Partnership Act, 1932. In case any point in Partnership Deed is silent, then the provisions of the Act would apply.

Advice Brain helps you in registration of partnership firm. We extend our full support in documentation, preparation, filing and subsequent Follow-up with departments and complete the entire process in is 8 - 10 Working days.

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Partnership Firm

BENEFITS

  • Low Cost Registration
  • Minimal Compliance
  • Easy to establish
  • Audit not required
  • Tax Benefit
  • Sharing of Risk

Eligibility

  • Minimum 2 Partners
  • No Minimum Capital Requirement
  • Unique Name
  • Partnership Deed
  • Notary of Partnership Deed

Procedure for Partnership Firm

Verification & Name Approval

The name must be unique and should not be same or similar to an existing company, LLP or a trademark.

Drafting of Partnership Deed

The Partnership deed is a document which contains respective rights and obligations of the partners& their relationship among themselves as well as the relation of partners with the firm.

Notary of Partnership Deed

Partnership Deed should be well draftedand signature of the partners must be made on the agreement in the presence of witnesses before a Notary.

Registration of Firm

The signed partnership agreement along with the KYC of partners and premises proof is filed with the concerned Registrar of Firms.

Documents Required for Private Limited Company

  • Statement in Form 1
  • Two Photograph
  • In case of rented property- Rent agreement
  • Notarised True copy of the Partnership Deed
  • Latest Utility Bill
  • Copy of PAN Card of partners
  • In case of owned property- Property papers
  • NOC from the owner of premises (Format will be provided)
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FREQUENTLY ASKED QUESTIONS

1. What is partnership firm?

Partnership Firm is a business structure that are owned, managed and controlled by a Group of People for profit. It is one of the easiest ways to form a legal entity.

The amount of stamp duty is based on the below mentioned two factors:
  • Capital contribution by partners
  • State in which partnership firm is to be formed

To start a partnership firm, there should be minimum two partners. The maximum number of partners can go upto 20.

Legal proof of partnership firm is a signed and notarized Partnership deed drafted on appropriate value of non-judicial stamp paper.

There are majorly of two types which is registered and un-registered Partnership firm. Registration is not mandatory but comes with added advantages.

Yes, you can name your partnership whatever you want.However the name is not secured under laws from being copied. If you want your name to be secured, we advise you to incorporate aLLP.

Though registration of partnership firm is not mandatory under the Indian Partnership Act, 1932 but Section 69 places certain disadvantages to an unregistered firm which are:
  • Set off can be claimed only by a registered partnership firm.
  • Partnership FirmAn unregistered partnership firm cannot recover any sum due from third parties of an amount exceeding Rs. 100/-
  • Partnership FirmAn unregistered partnership firm cannot file a legal suit in the court of law for the enforcement of rights against partners.
  • Partnership FirmIn anunregistered partnership firm, a partner cannot file suit against another partner or the firm itself

No, All the partners are jointly and severallyin order to discharge their liabilities.

Registrar of Firms having jurisdiction over the place of business of the partnership firm is eligible to entertain application for registration of Partnership firm. After receipt of the application, if the application is complete in all aspects and all required documents are submitted, the Registrar of Firms issues the Certificate of Registration within 1-2 weeks.

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. Audit of a firm is not required. However, tax audit is mandatoryif the turnover crosses 2 Crore.

It is optional if you want to register your partnership firm with state authorityThough registration of partnership firm is not mandatory under the Indian Partnership Act, 1932 but Section 69 places certain disadvantages to an unregistered partnership firm.

Yes, a partnership firm can be converted easily into a LLP or a Private Limited Company.

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