Partnership Registration

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Partnership Registration

The partnership firm is an association of 2 or more persons who desire to come together and carry out a business in accordance with the terms and goals set out in the Partnership Deed. Further, more than one owner helps to increase the skills and improves the decision-making process. In addition to this, the risk of losses will be shared by all the members in this type of company. It is registered under The Partnership Act, 1932.

 

Partnership firm represents a business entity that is formed with a purpose of making a profit from the business. Two or more parties come together with a formal agreement (known as Partnership Deed) to own and manage the business. The risk and responsibilities are shared amongst the partners that shred the burden of an individual partner. Also, when two comes together, more capital and expertise are combined that helps to reach the business goal(s) easily.

Partnership Act, 1932 defines the structure of a Partnership firm by providing all the necessary provisions to run the same. The Act validates both registered and unregistered partnership firms in India. However, an unregistered partnership has few shortcomings that attract partners towards Partnership Firm Registration. But, one can overcome it by registration firm anytime after it is formed.

Naming Criteria

  1. The name of a Firm should have a short, unique and meaningful name shall not be identical with or too nearly resembles the name of an existing company.
  1. No Firm shall have a name which, in the opinion of Central Government, is undesirable or the name proposed resembles any connection with Government or State patronage, unless prior approval of the Central Government is obtained.
  1. The name of the Firm shall not be one prohibited under the Emblems and Names (Prevention of Improper Use) Act, 1950.
  1. The name should not be such that its use by the company will constitute on offence under any law.
  1. The name should not be illegal or offensive.
  1. The name should not be misleading for the public.

Eligibility for registering Partnership Firm

  1. Only a natural person who is a resident of India can be a partner.
  1. Every Firm shall have at least 2 partners.
  1. Karta of HUF can be a partner in a partnership firm.
  1. A company being an artificial legal person can be a partner in a firm if authorised by its articles.
  1. Unless and until constitution or objects of trustees forbids to the contrary, trustees of religious trust/family trust/or any other religious endowments can be partners in a partnership firm.
DOCUMENTS/DETAILS REQUIRED FOR REGISTRATION OF PARTNERSHIP FIRM
  1. Statement in Form 1 with the prescribed fees
  2. Notarised True copy of the Partnership deed stating the following:
  • The firm-name
  • Nature of business of the firm
  • Place or principal place of business of the firm
  • Names of any other places where the firm carries on business
  • The date when each partner joined the firm
  • Names and permanent addresses of the partners
  • Duration of the firm
  1. Two identity proof of Partners – Copy of Aadhaar Card/ Voter ID Card/ PAN Card (compulsory).
  2. Address proof of the Partners (Voter ID, Passport, Driving license, etc.)
  3. Ownership and sale deed (In case your own premise) and one address proof of registered office (like water, telephone, mobile bill or copy of bank pass book or net banking statement mentioning address of the applicant).
  4. In case the property is on rent then you need to submit a copy of the rent agreement with NOC from Landlord.
  5. PAN Card of the firm.
DOCUMENTS/DETAILS REQUIRED FOR GST REGISTRATION OF PARTNERSHIP FIRM
  1. Proof of identity of all partners. Such documents include Aadhaar, PAN, Passport, Driving license or any other Government-issued identity document would be required.
  2. Bank account details. 
  3. In the case of leased property, the copy of lease deed for the registered office premises along with a NOC from Landlord and electricity bill/property tax receipt/water bill copy of the registered office property.
  4. In case of own property, copy of sale deed along with the electricity bill/property tax receipt/water bill copy of the registered office property.
ADVANTAGES
  1. A partnership registration is very easy and inexpensive as compared to LLP.
  1. It has minimum compliance requirement.
  1. Registration is optional.
  1. Audit of accounts is not compulsory.
  2. No minimum capital required.

 

DISADVANTAGES
  1. It is not created by law. It can be created just orally or by mutual agreement.
  2. It is not considered as a separate legal entity; hence the partners face unlimited liability.
  3. Since it not created by law, it does not have perpetual succession.
  4. Maximum number partners can be only 50 if the firm is not registered.
  5. It faces difficulty to raise funds.

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