Wellcorp

Process of Partnership Firm Registration

One of the most meaningful types of organizations is partnership. A partnership firm is formed when two or more people create a business and agree to split the profits in a particular proportion. Any trade, occupation, or profession is included in the partnership business. A partnership firm is simple to incorporate and requires fewer regulations than a corporation.

Partnership firms in India are handled and regulated by the Indian Partnership Act 1932. Partners are the people who join concurrently to create a partnership firm. An agreement among the partners confirms the partnership enterprise. A contract between partners that governs their relationship with one another and their relationship with the partnership firm is called as a partnership deed.

Importance of Registering a Partnership Firm

The Indian Partnership Act creates enrolment of a partnership firm optional rather than compulsory. It is entirely up to the partners decision and is entirely voluntary. The business can be documented at the time of its formation or incorporation at any time during the partnership firm's function.

However, registering the partnership firm as a registered firm with specific rights and privileges over unregistered firms is always a good idea. The advantages that a partnership firm enjoys are as follows:

To exercise his rights emanating from a contract against a partner or the partnership firm, a partner can sue any other partner or the partnership firm. Partners in an unregistered partnership firm cannot sue the firm or other partners to enforce their rights.
The registered firm can initiate a lawsuit against any third party to enforce a contract right. An unregistered firm cannot bring a lawsuit against a third party to enforce a right. On the other hand, any third party can sue the unregistered business.
The registered firm can seek set-off or other legal action to enforce a contractual entitlement. In any litigation against it, the unregistered company cannot claim set-off.

Documents Required for Registration of Partnership

The following are the documents that must be submitted to the Registrar for a Partnership Firm to be registered:

Application for registration of partnership (Form 1)
Certified original copy of Partnership Deed.
Copy of an affidavit attesting all the details written in the partnership deed and documents are correct.
Address proof and PAN card of the partners.
Proof of principal place of the firm's business (ownership documents or rental/lease agreement).

If the documents satisfy the Registrar, the firm will be registered in the Register of Firms, and a Registration Certificate will be issued. The Register of Firms keeps up-to-date information on all businesses and can be read by anybody for a price.

Partnership Deed

A partnership deed is a contract between partners that specifies each partner's rights, responsibilities, earnings, shares, and other obligations. It can be written or oral. However, it is always better to be in writing, to avoid future disagreements.

Details Required in a Partnership Deed

General details

Name and location of the firm and all the partners.
The Nature of business.
Date of commencement of business, capital to be shared by each partner.
Capital to be contributed by each partner.
Profit/loss sharing ratio among the partners.

Specific details

Aside from them, some particular terms may be included to avoid any future issues:

Interest on money invested, partner drawings, and any loans given by partner to the firm.
Salaries, commissions, and any other sums due to partners.
Each partner's rights, including additional rights reserved for active partners.

All partners responsibilities and obligations.
Adjustments or procedures to be followed in the event of a partner's retirement, death, or the firm's dissolution.
Other clauses as determined after a mutual discussion.

Timelines for Partnership Firm Registration

The partnership firm registration process takes about ten days, depending on departmental approval and reverts from respective department.

Checklist for Partnership Firm Registration

Drafting of Partnership Deed.
Minimum two members as partners.
Maximum of one hundred partners.
Selection of an appropriate name.

Principal place of business.
Bank account details and PAN card of the firm.

Documents Required for Registration of Partnership

The following are the documents that must be submitted to the Registrar for a Partnership Firm to be registered:

Application for registration of partnership (Form 1)
Certified original copy of Partnership Deed.
Copy of an affidavit attesting all the details written in the partnership deed and documents are correct.
Address proof and PAN card of the partners.
Proof of principal place of the firm's business (ownership documents or rental/lease agreement).

If the documents satisfy the Registrar, the firm will be registered in the Register of Firms, and a Registration Certificate will be issued. The Register of Firms keeps up-to-date information on all businesses and can be read by anybody for a price.

Partnership Deed

A partnership deed is a contract between partners that specifies each partner's rights, responsibilities, earnings, shares, and other obligations. It can be written or oral. However, it is always better to be in writing, to avoid future disagreements.

Details Required in a Partnership Deed

General details

Name and location of the firm and all the partners.
The Nature of business.
Date of commencement of business, capital to be shared by each partner.
Capital to be contributed by each partner.
Profit/loss sharing ratio among the partners.

Specific details

Aside from them, some particular terms may be included to avoid any future issues:

Interest on money invested, partner drawings, and any loans given by partner to the firm.
Salaries, commissions, and any other sums due to partners.
Each partner's rights, including additional rights reserved for active partners.

All partners responsibilities and obligations.
Adjustments or procedures to be followed in the event of a partner's retirement, death, or the firm's dissolution.
Other clauses as determined after a mutual discussion.

Timelines for Partnership Firm Registration

The partnership firm registration process takes about ten days, depending on departmental approval and reverts from respective department.

Checklist for Partnership Firm Registration

Drafting of Partnership Deed.
Minimum two members as partners.
Maximum of one hundred partners.
Selection of an appropriate name.

Principal place of business.
Bank account details and PAN card of the firm.