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Partnership Firm

In Just 15 days . From Any where in India. In just 3 Simple Steps

Partnership Firm Registration Online in India

A partnership firm is a type of business structure that is well-recognized by most of the entrepreneurs. This type of business structure is preferred with the mutual consent of all the partners of the company for a profitable purpose. Generally, the firm is managed, controlled, and owned by a set of people known as partners with some shared capital in the firm.

An affiliation of two or more individuals who have decided to merge in business activities is coined as a partnership firm. The main aim of such an organization is to gain more profit. Members of this partnership firm are named partners. All the partners or the members of the firm share the profits and losses of their in the proportion of their respective ownership and contribution.

In the case of a partnership firm, the amount of money invested is often huge as each partner or member can contribute to the total amount of capital investment required. The decision-making partnership firm process & procedure is a corporate or collective business. Each and every partner must travel in the same way before making any decision regarding the business.

Partnership firms are of two different types, registered and non-registered firms. A Registered Partnership Firm is not mandatory in India but it is highly recommendable to register. Registered Partnership Firms enjoy various advantages which are not applicable to Non-Registered Partnership Firms. With very less documentation, rules, and formalities, a partnership registration of a firm is done as per the Partnership Act, 1932

Documents Required for Partnership Firm Registration

Partnership Deed

  1. A partnership deed is an agreement that is prepared and formed by the partners of the firm and defines all the rules, duties, regulations, methodology, functions, and shares of the business. A Partnership Deed registration online is mandatory as it helps to avoid future disputes, discomfort, and conflicts between the partners. A Partnership deed is created and signed by all the partners or the members on the Judicial Stamp Paper which costs around Rs. 2000/-

PAN Card

  1. All the registered partnership firms or the members of the partnership firm are required to present their PAN cards as their identity proof.

Address Proof

  1. All the designated partners have to present a copy of their address proof such as an aadhar card, voter id, driving license, ration card, etc. The address and information given in the address proof document should match with PAN card information.

Office Address Proof

  1. Address proof of the registered working place has to be submitted. If the registered office place is a rented property, then the applicant has to present the rent agreement with a utility bill such as an electricity bill, gas bill, water bill, property tax bill, and so on. And also the applicant should submit the No Objection Certificate or NOC from the owner of the registered office place.

Registration Procedure of Partnership Firm in India

  1. Select a Unique name for the partnership firm
  2. File Form 1 application of partnership firm registration.
  3. Submit the filled application form to the Registrar of the Firm of the state where the firm is going to start. The application form has to be filled in the prescribed format with a specified fee amount.
  4. A partnership deed is planned and prepared properly with the consent of all the partners or the members of the firm on the stamp paper. The following are important components of the Partnership Deed:
  5. Information about the partners and firm such as name,  qualification, address, etc.
  6. Nature of the business and the business activities involved
  7. Details about The capital contribution made by all partners of the firm
  8. Shares and the interest of all the partners
  9. Details about the sharing of Profit and loss ratio among all the partners of the firm
  10. Rules, regulations, rights, duties, commissions, salaries, or payable amount of the partners of the firm
  11. Details of loans offered by the partners of the firm
  12. Process or circumstances that would be followed if a designated partner is dead or getting retirement
  13. Other articles made with the mutual consent of all the members or partners of the firm
  14. Submission of all documents required for partnership registration with the partnership deed which was prepared by the partners of the firm.
  15. After submission, the documents are verified by the concerned authorities. If everything falls under the provisions of the act, the registration certificate is granted to the firm.

Types of Partners in a Partnership Firm

  • In a partnership firm, there are different types of partners who may have varying roles, responsibilities, and ownership rights. Here are the common types of partners in a partnership firm:

General Partner:

  1. A general partner is an active partner who takes part in the day-to-day management and operations of the partnership. They are also liable for the debts and obligations of the partnership.

Limited Partner:

  1. A limited partner is a passive partner who invests in the partnership but does not take part in the management or operations of the business. They have limited liability for the partnership’s debts and obligations.

Sleeping Partner:

  1. A sleeping partner is a silent partner who invests in the partnership but does not take an active role in the management or operations of the business.

Nominal Partner:

  1. A nominal partner is a partner who lends their name to the partnership but does not contribute any capital or take part in the management or operations of the business.

Partner By Estoppel:

  1. A partner by estoppel is a partner who is not actually a partner in the business, but whose actions or statements lead others to believe they are a partner. This can create legal liability for the individual.

The specific roles and responsibilities of each partner may vary depending on the partnership agreement and the nature of the business. It is important for all partners to have a clear understanding of their rights and obligations to avoid disputes and legal issues in the future.

Advantages of Partnership Firm

Funds Raising:
  1. Compared to other firms or business structures like a proprietorship firm, funds can be easily raised through the registration of partnership firms. Banks consider this type of firm more favorable for approving credits and loans and also having multiple partners in the firm pay the way to get a more feasible contribution.
Easiest Business Structure:
  1. Partnership firms are broadly considered one of the easiest business structures as they can be incorporated by simply formulating a partnership deed for which the registration process is necessary. Therefore, it can be formed anytime when the partners are ready to contribute and just with very minimum documentation whereas in the case of other types of firms, it requires about 10-15 days to cover up all the formalities such as obtaining DSC DIN, DPIN name approval, and so on.
Decision Making:
  1. It’s an easier and simpler process to make a decision in a partnership firm registration in India as you don’t have to follow any rules and regulations to pass a resolution in the firm. A partner of the firm can perform transactions or money-related activities on behalf of the partnership firm without any consent of other designated partners.
Easy Management:
  1. All the partners of the partnership firm are assigned their own works and responsibilities considering their capability, as drafted in the partnership deed. Partnership deed aids the partners of the firm to manage the business smoothly without any type of conflicts and disputes.

Disadvantages of the Partnership Firm

Unlimited Liabilities:
  1. The liabilities of partners of the partnership firm are not limited which is the biggest drawback for the partners of the firm. In case of any other misfortune or debt, the personal assets of the partners can be used to clear the loans or issues, or debts. Limitation on the maximum number of members, yes, the maximum number of partners is limited to 20 in the Partnership Firm.
Less Trustworthy:
  1. As a partnership firm, can be formed easily and can run without any registration process, and can also function without any specific rules and regulations making it less trustworthy among the general public.
Abrupt Dissolution:
  1. The registration of a partnership firm is compulsory and can be dissolved easily in case of insolvency or the death of any partner. Such conditions halter the growth and development of the business.

Partnership Firm vs LLP

Partnership Firms and Limited Liability partnerships (LLP) are two popular forms of business organization in India. Here are some differences between the two:

Liability: 

  1. In a partnership firm, all partners have unlimited liability for the debts and obligations of the firm. On the other hand, in an LLP the liability of each partner is limited to their contribution to the firm.

Legal Entity:

  1.  A partnership firm is not considered a separate legal entity from its partners. LLP is a separate legal entity from its partners.

Management: 

  1. In a partnership firm, all partners have equal rights and responsibilities in the management of the business. On the other hand, in an LLP, partners have the flexibility to decide how they want to manage the business.

Compliance: 

  1. Partnership firms are subject to fewer compliance requirements as compared to LLPs. LLPs need to comply with various legal and regulatory requirements, including the appointment of auditors, maintenance of annual filings, and statutory audits.

Continuity: 

  1. A partnership firm dissolves upon the death, retirement, or insolvency of a partner. In contrast, an LLP is a perpetual entity and continues to exist even if one of the partners dies, retires, or becomes insolvent.

Why HSRAdvisory for Registering a Partnership Firm

Expertise and Experience:

HSRAdvisory has a team of experts who are knowledgeable about the registration process and can guide you through it smoothly. They have experience in handling various types of registrations and can help you choose the right type of partnership and draft a partnership agreement that suits your needs.

Time-Saving:

The process of registering a partnership firm can be time-consuming and complex. By using HSRAdvisory ‘s services, you can save time and focus on your core business activities.

Compliance:

HSRAdvisory can also help you comply with various legal and regulatory requirements such as obtaining the necessary licenses, company registrations and TDS filings and maintaining compliance with tax and other laws.

Cost-Effective:

HSRAdvisory’s services are cost-effective and transparent, and they offer various packages that suit your budget and needs.

Hassle-Free Process:

HSRAdvisory takes care of the entire process from start to finish, making it a hassle-free experience for you.

Steps for registration

Step 1

A small river named Duden flows by their place and supplies it with the necessary regelialia. It is a paradise

Step 1

A small river named Duden flows by their place and supplies it with the necessary regelialia. It is a paradise

Step 1

A small river named Duden flows by their place and supplies it with the necessary regelialia. It is a paradise
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Frequently Asked Questions

Answered by our experts

The individuals who are residing in India can only become partners or members in a Partnership firm. Foreign Individuals who want to form their business in India can choose Private Limited Company.

Yes, a partnership firm can be converted into a Private Limited company by submitting the prescribed form to the concerned authority.

Once the partnership deed is notarized, you can apply for the PAN Card. You can take our assistance and guidance if you need to apply for PAN for the Partnership Firm.

A partnership firm is a type of business structure where two or more individuals come together to carry on a business with the intention of sharing profits and losses.

To register a partnership firm partners need to file an application with the Registrar of Firms in the prescribed format along with the necessary documents.

A partnership firm is taxed as per the Income Tax Act, 1961. The partners are taxed on their share of profits from the partnership firm. Additionally, the partnership firm is required to file income tax returns and pay income tax on the total income earned.

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