What do you mean by Partnership Firm?
To form a Partnership Firm online, minimum two people are required and as compared to other business entities, legal compliances are less, therefore it is the most suitable and easy type of business structure in India.
In other words, partners are the individuals who have agreed to carry on the business and share both profits and losses in the agreed ratio.
For providing professional legal services, India Financial is India's leading platform and registration of partnership firm in no time and with no disputes, our team of experts professionals are there.
What do you mean by Registration of Partnership Firm?
Registration of partnership is not mandatory as it the discretion of the partners weather to register it or not. But in order to avail the legal benefits of the firm registration is needed.
Characteristics of Registering Partnership Firm in India
Following mentioned Characteristics make a registration of Partnership Firm easy and convenient:
- Requirements are of only two persons.
- Responsibilities and duties are shared among the partners of the Company
- Registering Partnership firm is optional.
- Legal formalities are less
- Compliances are minimum
- Firm cannot appoint minor as its partner
- Making decisions are not complicated.
- No expenses are involved for establishing the firm.
Consequences in case Partnership Firm is not registered
Rights which are mentioned under the Indian Partnership Act, 1932 cannot be enforced by the partners when the partnership firm is not registered. Partners cannot claim for setoff in case of any disputes; however, Partnership Firm can be sued by the third party.
Documents required for registering the Partnership Firm in India?
- Form 1 for registration application of Partnership Firm.
- Notarized Partnership Deedâ€™s Certified Copy on stamp paper
- Affidavit Specimen
- Where property is owned, Ownership Documents are required and rent agreement in case the property is on rent.
- of all the partnerâ€™s Identity Proof and residential proof (Permanent Account Number/ Aadhar Card/ Driving License/ Copy of voter Identity card/ Passport)
Procedure for getting a Partnership Firm registered in India
Along with the prescribed fees online application form of Partnership Firm registration in India is filed with the registrar of firms of the state in which the firm is located. All partners or their agents shall sign the registration application form. Thereafter, all the partners with notarization shall sign the Partnership Deed which is created on stamp paper.
Certificate of Registration shall be issued by the Register of Firms, after getting satisfied on verification of documents. Updated information of the firms is maintained under the Register of Firms and anybody can view the same upon payment of certain fees.
Step by Step Procedure for Online Registration of Partnership Firm in India
- Name selection of Partnership Firm
- Partnership Deed Creation
- Registration of Partnership Firm
Components of the Partnership Deed
- Firm and its partnerâ€™s information such as name, address and mobile number.
- Partnership Firmâ€™s Nature.
- Information of capital contribution made by each Partner in the firm.
- Ratio of sharing profits and losses among partners
- Interest on capital invested by the partners in the firm.
- Information of drawings made or loans provided by partners
- Amount payable to partners such as Salaries, commissions or any other amount.
- Partnerâ€™s Rights and Duties/Obligations.
- Retirement or death of any partner process.
- Other clauses which are mutually decided.
Partnership deed must be duly stamped and notarized for registering Partnership Firm. Our team of professionals will draft your partnership deed in a very experienced and professional manner.
Partnership Firm Tax compliances in India
Obtaining PAN and TAN from the Income Tax Department after Partnership Firm Registration are mandatory in India.
Return of income has to filed by Partnership Firm weather the firms incurs profit or loss. The tax rate on the total income is 30% plus surcharge on income tax.
Post Partnership Firm Registration Requirements
To make a strong and healthy place and to be in competition with other firms in the industry. Following necessary steps are required to be followed once the registration of Partnership Firm gets completed.
Opening of Bank Account
After the registration of Partnership Firm, bank Account on the name of Partnership is required to open and for this you need to submit Permanent Account Number and other details and documents as required by the bank.
Registration of IP (Intellectual Property)
To save the trademark and patent from infringement and duplication (misuse), Registration of the IP provides should be done, due to which brand value and market value is not affected by the competitors. Under the Trade Marks Act, Logo provides protection.
Standardized policies and procedures and rules and regulations contribute toward the growth of partnership firm. On the basis of Partnership Firmâ€™s structure, the partnership firm is required to draft certain policies and agreements.
Printing is the next step such as printing of billheads and letterheads, in which the name of the firm is mentioned.
Registration GST (Goods and Services Tax)
Businesses whose annual turnover/ receipts is more than Rs. 40 Lakhs (Rs 20 Lakhs for Northeast states), become eligible for registration under Goods and Services Tax regime. In certain businesses, GST registration becomes compulsory such as Export-Import, E-commerce, and Market Place Aggregator.
How India Financial will assist you in the registration of Partnership Firm?
Do You Have Any Questions?
To protect the name of the partnership firm, you can protect it with the Trademark registration.
Minimum 2 persons are required to form the partnership firm and maximum 20 persons can come together with the motive of earning profits.
Only to maintain the current bank account balance, you need to contribute capital and there are no such minimum capital requirements.
Registration of Partnership Firm can be skipped and registration under Micro, Small & Medium Enterprises can be applied. Application for registration under Micro, Small & Medium Enterprises can be filed and current bank account can be opened.
Partners carrying on the business must be resident in India. Private Limited Company registration is required to set up business entity with foreigners. As a result, Partnership Firm cannot appoint foreigner as its partner.
An income tax return and GST return filing is required to be filed on time by Partnership Firm. Moreover, all partner’s personal income tax returns in the partnership firm are also required to be filed.
A prescribed form with the authority is required to be filed to convert Partnership Firm into a Private Limited Company.
Partnership deed and partner’s KYC documents such as Identity Proof and address proof as per RBI guidelines and PAN of the partnership firm are required to be submitted to the bank for opening of current bank account with the banks.
After the partnership deed is notarized, the application for obtaining PAN can be filed. Our team shall file PAN application on your behalf.
Yes, anyone can make investment in Partnership Firm, but only an Indian resident person can make the investment in Partnership Firm in India and the liability of partners is unlimited unlike LLP or Private Limited Company.
No, you would not be required to visit any department, all the process shall be done online. You would only be required to be physically present to notarize the partnership deed.
The Partnership Firm registration application is submitted with the Registrar of Firms who has the jurisdiction over the place of business of the partnership firm. On the receipt of the application registrar, the firm will scrutinize the documents issues the Certificate of Registration of Partnership Firm.
Filing of annual return is not compulsory but it has to file Income tax Return before the due date. There is no such provision of audit in partnership Act, 1932, therefore, audit of books of accounts is not compulsory in the partnership firm too, but the tax audit is compulsory in case the turnover exceeds Rs. 2 Crore.