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Partnership Firm Registration – Process & Partnership Deed

partnership firm registration

Partnership Firm Registration means the registration by the partners with the Registrar of firms. The partners shall register the partnership firm with the Registrar of firms of the concerned state where the firm is situated. 

A partnership firm is an association of two or more partners coming together for a business and dividing the profits in an agreed ratio.

The Indian Partnership Act, 1932 is governing and regulating partnership firms in India. The individual who comes together to form the partnership firm is known as a partner. The partnership firm is created under a contract between two or more partners. In this article, we will be understanding the process of partnership registration along with its fees and certificate.

What is the Process of Partnership Firm Registration?

The registration of a Partnership Firm is optional and not mandatory under the Indian partnership Act, 1932. It is the voluntary choice of the partners. The following are the steps for registering a Partnership Firm:

Step 1: Application for Registration

An application form has to be filled out to the Registrar of firms of the state in which the firm is situated along with prescribed fees. The application for registration must be signed and verified by the partners.

The application must have the following details:

  • The name of the firm
  • The registered office of the firm
  • The location of any other places where the Partnership Firm Registration carries on business
  • The date of joining of partners
  • The names and permanent addresses of the respective partners
  • The duration of the firm

Step 2: Selection of the Name of the Partnership Firm

Any name can opt for a Partnership firm. However, certain conditions need to be followed while selecting the name:

  • The name shall not be similar or identical to an existing firm’s name carrying out the same business
  • The name should not contain words like an emperor, crown, empress, empire, or any other words which show sanction or approval of the government.

Step 3: Partnership Registration Certificate

When the registrar is satisfied with the registration application and the documents, he will register the firm in the Registrar of firms and issue the Partnership Firm Registration Certificate. The registrar of firms contains up-to-date information on all firms, and anybody can view it after making the payment of given fees.

What are the Documents Required for Partnership Registration Online?

The documents which are required to be submitted to the Registrar for registering a Partnership firm are as follows:

  • Application for partnership registration
  • Certified original copy of Partnership deed
  • An affidavit certifying all the details mentioned in the partnership deed and other registration documents are correct
  • PAN card and address proof of the partners
  • Proof of principal place of business of the form (ownership documents or rental/lease agreement)
  • Any registration document issued by the state or central government, such as GST registration for Partnership Firm Registration Online India.

When the registrar is satisfied with the provided documents, he will register the firm in the Registrar of firms and issue a Certificate of Registration to the firm.

What are the Details Required in Partnership Deed?

The Partnership deed is a partnership agreement between the partners of the firm which sets the terms and conditions of the partnership between the partners. The Partnership Firm Details are given below in two categories:

1. General details

  • Name of all the partners
  • Partners and firm Address
  • Nature of business
  • Date of starting the firm and capital contributed by each partner
  • Capital to be contributed by each partner for Partnership Firm Registration
  • Profit/loss sharing ratio among the partners

2. Specific details

There are certain details specified in the deed to solve the conflict between the partners at a later stage:

  • The interest of capital invested and drawings by partners or any loans provided by partners to the firm
  • Salaries and commission or any amount payable to partners
  • Rights of each partner consisting of additional rights to be enjoyed by the active partners
  • Duties and obligations of all partners
  • Adjustments to be followed in the event of retirement or death of an existing partner or dissolution of the firm
  • Other clauses may be decided by a mutual discussion with the partners.

What is the Importance of a Partnership Deed?

A well-drafted Partnership Deed is important for Partnership Firm Registration which contains all the legal provisions. The deed must include the basic guidelines for future projects and can be used as evidence at the time of conflict. A few points of its importance are listed below:    

  • It specifies and controls the rights, responsibilities, duties and liabilities of all the partners
  • It helps in avoiding disputes between the partners
  • It helps in avoiding confusion on the profit and loss distribution ratio among the partners
  • Individual partners’ responsibilities are mentioned clearly.
  • The partnership deed lays out the remuneration or salary of the partners and working partners. However, the interest is paid to each partner who has invested capital in the business       

What are the Major Effects of Non Registration of Partnership Firm?

The Partnership Act, 1932 does not contain the compulsory Partnership Firm Registration. However, the Act puts pressure to register the partnership firms. It gives a list of drawbacks of not registering the firm. The following are the key drawbacks of non-registration of partnership firms:

1. A unregistered partnership firm cannot file suit against a co-partner or a third party

2. A unregistered partnership firm cannot avail of set-off claim against third parties

3. Third parties cannot be estopped from suing the unregistered partnership firm

4. Partners cannot take action against another partner

5. Conversion to another entity is not possible

What are the Advantages of a Partnership Firm?

The minimum number of partners in a Partnership firm must be at least two. The following are the advantages of Partnership Firm Registration:

1. Easy formation – It is not mandatory to register the partnership firms and also it does not involve any formalities.

2. Larger resources – The partnership firm has larger resources due to more number of human resources involved in it their business operations in comparison with the sole proprietorship.

3. Flexibility in operation – The partnership firm has the benefit of flexibility as it can take decisions and changes in accordance with the dynamic situation of the economy.

4. Better management – The ownership, administration and profit in the partnership firm that the business can be managed very well.

5. Sharing of Risk – In the partnership firm the loss is shared individually by all the partners which reduces the burden and makes the process at ease.

Closure Now…

The Partnership firm is a very popular business form in India. For Partnership firm registration, two or more persons must come together as partners, agree on a firm name and enter into a Partnership deed. However, partners cannot be members of a HUF or husband and wife. 

The Indian Partnership Act, 1932 is governing law for partnership firms. There are benefits to the registration of a Partnership firm and we have understood the process of registration and the documents required for the same. 


Online XBRL is the leading platform for Partnership Firm Registration Services in India. So, connect with us now.