Partnership Firm Registration
Start a Partnership Firm with your chosen partners and get the profits in an agreed ratio. Get the Partnership Firm Registration now.
To avail our services, we charge 499/- as an advance or security payment.
AN SUMMARY OF Partnership Firm registration
A Partnership is a short and honest word with a vital purpose. In the corporate field, the term partnership relates to a relation or an association between two or more people who decide mutually to establish a business and share profits and losses of such a company. This business structure is either supported by all the partners or anyone acting for all (Principal and Agent Relationship).
Moreover, it is established on legal terms; therefore, all the rules and regulations must be complied with while taking Partnership Firm Registration. Finally, this business form is usually decided either by the entrepreneurs, budding start-ups, or medium and small-sized firms are working in random sectors.
Some of the most excellent and famous examples of a partnership include GoPro & Red Bull, Pottery Barn & Sherwin-Williams, BMW & Louis Vuitton, Apple & MasterCard, Starbucks & Spotify, etc.
What is a Partnership Firm?
A Partnership Firm is a business model governed and regulated by the Indian Partnership Act, 1932. This business structure needed two or more individuals for controlling and performing a business according to the terms, conditions, Management, and goals selected in the Partnership Deed. Moreover, it is uncommon to note that the Partnership contract is considered the Magna Carta of the Partnership Firm. All the details, terms, roles, and duties of each Partner, profit distribution ratio, the quality of the work, etc., are set in the Partnership contract itself.
LIST OUT THE FEATURES OF A PARTNERSHIP FIRM REGISTRATION ONLINE?
Partnership Firm Registration Online:
- At least two people are needed to establish a Partnership Firm.
- Roles and duties are shared between all the partners working in the Partnership Firm.
- Fewer Agreements
- Minimal Legal Agreements
- A Minor is not able to become a partner in the partnership firm.
- Flexibility and Comfort in Decision Making
- Inexpensive to Incorporate
ADVANTAGES OF A PARTNERSHIP FIRM REGISTRATION?
The following listed are the advantages of partnership firm registration:
- Requires a Minimum of Two Persons:
At least two people are required to start a partnership firm. Further, a maximum of 20 peoples is allowed in a partnership firm. However, a maximum of 10 people is allowed if the partnership firm deals with some banking activities.
- No Prescribed Minimum Capital:
There is no direct limit of the minimum capital required in a partnership firm.
Like proprietorship, the partnership business is also flexible. The partners can appreciate and immediately respond to the changing requirements. No giant business organization can stifle such quick and inventive responses to new opportunities.
- Diffusion of Risk:
You have just seen that total losses are owned by the sole proprietor only, but in a partnership scenario, all the partners share all losses as per their agreed profit-sharing ratios. Thus, the share of loss in each Partner’s case will be less than that in the case of proprietorship.
- Profit and Loss Sharing:
There is a bond among the partners to share the profits earned and losses incurred in the partnership business.
- Partnership contract:
In a Partnership Firm, all the associates working are distributed works, responsibilities, jobs as per their ability, and the same thing is declared in the Partnership contract. Further, a Partnership deed works as a Magna Carta for the Firm as all the features, terms, roles and responsibilities, profit-sharing ratios, etc., are discussed in it. Furthermore, it also helps in extirpating or decreasing the chances of conflicts within the partners.
MAIN FACTORS OF A PARTNERSHIP AGREEMENT
A partnership contract is an agreement signed with the partners regarding the partnership firm’s working and operation. Moreover, a partnership agreement can be both verbal and recorded. However, it is always suggested to draft a partnership deed in a written form to avoid future struggles.
The following listed are the primary elements that are to be incorporated while drafting a Partnership Agreement:
- Details regarding the Firm and its partners, such as the name and address.
- Type of the Business.
- Information about the capital shared made by each Partner.
- Profit and loss sharing ratio between all the partners.
- ROI on invested amount of money.
- Details of the partners’ representations or the credits given by partners.
- Wages, commissions, or any other such sum to be due to the partners.
- The powers and responsibilities of each Partner should be equal.
- It is a process that will shadow in the case of retirement or death or any partner’s incapacity.
- Any other mutually decided clause.
Further, it is relevant to consider that the said partnership deed must be duly notarized and stamped for achieving a Partnership Firm Registration in India.
THE TYPES OF PARTNERSHIP FIRMS?
The types of a partnership firm are listed below:
- General Partnership
- Partnership at Will:
Usually, in the Partnership at will, the associates decide until they want the said Partnership to continue whenever a block is formed or established. Hence, a partnership is prepared without a specific time limit for its end. It is identified as the Partnership at will.
- Particular Partnership:
In a Selective Partnership, a Partnership is formed to carry out a unique and specific undertaking. Further, whenever a partnership firm is elected for a contract-based assignment or some selective business, they are known as partnerships. Moreover, this type of collaboration comes to an end once the purpose is achieved. However, it is unique to note that the partners’ discretion also plays an important role. If the partners need to continue to the Partnership, they can modify and increase the bond.
- Based on Registration:
- Registered Partnership: The Partnership that’s registered by the registrar having authority under the provision of the Indian Partnership Act, 1932, is taken into account because of the Registered Partnership.
- Unregistered Partnership: AN unregistered partnership firm is developed simply by capital punishment and agreement among the partners. Further, getting registration for a partnership firm is optional. However, it’s continually advisable to induce the Partnership described above Firm registered. In an unregistered partnership, partners don’t seem to sue the third party but can cause sued.
IS IT NECESSARY TO OBTAIN A PARTNERSHIP FIRM REGISTRATION?
No, obtaining a Partnership Firm registration is not required, but it is optional and changeable for the partners. However, it is appropriate to recognize that it is always advisable to get the partnership firm listed under the Indian Partnership Act, 1932. Similarly, a registered partnership firm has more advantages, special powers, and changes that are not possible with unregistered partnership firms.
DOCUMENTS REQUIRED FOR PARTNERSHIP FIRM REGISTRATION IN INDIA?
To register your Firm, you should have the necessary documents first. Here is a list of papers that are required:
- Partnership document signed by all the associates of the Firm
- Pan-card of all the co-workers
- Residence Proof of all
- Pan card of the Firm individually.
- Address proof of the Firm. If the place is rented, you want NOC from the landlord.
Many of you have doubts about what a partnership agreement is? It is then a juridical paper signed by the Firm partners to avoid any future hassles. It is signed on a legal stamp paper that includes information like the name of all partners, the Firm’s name, the business type, Date of initiation, profit-sharing percentage, etc. In the end, you will also require Tax enrolment for a partnership firm.
PROCEDURE OF THE PARTNERSHIP FIRM REGISTRATION?
The following steps included in the procedure of Partnership Firm registration :
- Choose a Unique name for the Firm:
The initial and essential step is to select a unique name for the partnership firm. Further, the chosen name should be unique and should not include the emperor, empire, crown, empress, etc., which show some support or sanction from the government. Moreover, the name chosen must also not be comparable to any present firm’s name involved in the exact business nature.
- File an Application for the Registration:
In the second step, the partnership firm partners must apply for the partnership firm’s registration in Form 1. The said application is filed with the RoF (Registrar of Firm) of the concerned state where the Firm is settled. Also, it is appropriate to note that the application is required to be filed in a proper format, with the specified fees.
- Preparation of a Partnership Deed:
All the associates are required to draft a partnership agreement on a stamp paper in the next step. Besides, a company agreement can be both verbal and written. It is always advised to draft a partnership agreement as it destroys or reduces the chance of any struggle.
- Submission of the Documents:
After that, partners need to submit all the essential documents and the composed partnership agreement.
- Verification of submitted documents:
Further, once the authorizations closely verify all the papers submitted and the application filed, and no exception is found, a Certification of Registration will be issued to the said partnership firm.
WHAT WILL BE THE CONSEQUENCES FOR A PARTNERSHIP FIRM NOT REGISTERED?
If the Partnership Firm is not registered, then the Firm associates cannot enforce their rights afforded under the terms of the Indian Partnership Act, 1932. It means that the concerned Firm can neither file litigation nor can claim for setoff in the case of any conflict with the third party. However, the third party is qualified to claim the unrecorded Partnership Firm.
Tax COMPLIANCES FOR PARTNERSHIP FIRM REGISTRATION?
Tax compliances that are registration of a Partnership Firm are listed below:
- Once the partnership firm’s registration is complete, the declared partnership firm’s partners must get a Permanent Account Number (PAN) and Tax Deduction Account Number (TAN) from the IT Department.
- A Partnership firm needs to file the Income Tax Return (ITR) regardless of the revenue made or loss acquired.
- In a Partnership Firm scenario, the income tax rate is charged 30 percent plus surcharge on the total income tax.
- Further, all the Partnership Firms getting an annual turnover of above than Rs One hundred lakhs obligated to get done a tax audit.
- Goods and Service Tax (Tax) registration is needed for firms whose yearly turnover beats the source of Rs 40 lakhs (Rs 20 lakhs in the North-Eastern states). However, getting Tax registration is mandatory for businesses distributing in the Export-Import, E-commerce, and the Market Place Aggregator.
- After obtaining Tax registration, the concerned Firm must file quarterly, monthly, and yearly Tax returns.
- Partnership firms commit to filing their quarterly Tax Deducted at Source (TDS) returns with TAN and are required to subtract Tax at source according to the current TDS rules.
- Lastly, obtaining the ESI Registration and ESI Return filing is mandatory for all the partnership firms.
DOCUMENT LIST FOR AFTER REGISTRATION OF PARTNERSHIP FIRM
Required documents for Annual Compliance of a Partnership Firm are mentioned below:
- Invoices of the sales made and purchased made through a financial year
- Invoices of all the expenses incurred during a financial year
- Bank statements of all the Partner’s bank accounts
- Proof of the Tax returns filed.
- Proof of the TDS returns filed.
FAQS FOR PARTNERSHIP FIRM
- Partnership at Will
- Particular Partnership
According to the Indian Partnership Act, 1932, a partnership firm's registration is not mandatory, and the same depends upon the partners' choice. However, it is remarkable that getting partnership registration is always advisable as a registered partnership firm likes some exceptional benefits that are not open to unregistered partnership firms.
- GoPro & Red Bull
- Pottery Barn & Sherwin-Williams
- BMW & Louis Vuitton
- Apple & MasterCard
- Starbucks & Spotify
- Easy to Start
- Decision Making
- Raising of Funds
- Sense of Ownership
- Effortless Management without any Fireworks
- Fewer Compliances
- Reasonable to Build
- Least Legal Duties
- Tax Benefit
- Statement in Form 1 along with the prescribed fees
- PAN Card
- Driving License
- Aadhar Card
- Voter ID
- The Firm Name
- Nature of the Partnership Firm
- The area where the registered office is located
- The Date of joining of each Partner
- The Duration of the concerned Partnership Firm
- The full name, along with the address of each Partner
- The name of all the places where the partnership firm will or carries out its business
- Sale Agreement in case one of the partners owns the place of business.
- Rental or the Contract Agreement if the certified office's land is on rent.
- Copy of the Utility Bill in Water Tax Receipt, Electricity Bill, Property Tax Receipt. However, it is essential to record that the stated bill or receipt must not be two months older.
No, an organization cannot accept or take a loan from a Partnership firm even though the partners of the same Partnership are members or administrators of the corporate. The reason is that the company can accept a loan only from an individual apart from the Director.
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