Beginners Guide to Partnership Company Registration Process

The Partnership Company registration process is a form of business that is carried by two or more persons known as partners who creates a Partnership firm. The partnership firm consists of trade, occupation and profession. A partnership firm is easy formed with less compliances as compared to companies. 

The Indian Partnership Act, 1932 is the governing and regulating partnership firms. The partnership firm is formed by a contract between two or more partners. The agreement between the partners is called as a partnership deed which specifies the relationship of the partners and also between the partnership firm and partners. In this blog, we will be discussing the process and documents required and costs.

What are the Steps Involved in the Partnership Company Registration Process?

The process for registering a partnership firm in India is as follows:

Step 1: Choosing the Partnership name

The partners are free to choose any name they desire for their partnership firm subject to the following rules:

• The names must not be too identical or similar to the name of another existing firm doing similar business so it may lead to confusion
• The name must not include words like crown, emperor, empire or words expressing or implying the sanction of the government.

Step 2: Create a Partnership Deed

The partnership agreement may be written or oral. However, an oral agreement does not have any value for tax purposes and therefore Partnership Company registration process agreement should be written. The essential characteristics of a partnership deed are given as follows:

a. General Details:

• Name, address of the partners with firm
• Nature of business
• Date of starting of business capital to be continued by each partner
• Capital contribution by each partner
• Profit/loss sharing ratio among the partners

b. Specific details:

Certain specific clauses that can be mentioned to avoid any conflict at a later stage are as follows:

• The interest on invested capital and drawings by partners
• Loans provided by partners to the firm
• The rights of every partner having additional rights is given to the active partners
• The Partnership Company registration process includes the details of the commissions, salaries or any other amount to be paid to partners
• Processes or adjustments to be followed on account of the retirement or death of a partner or dissolution of the firm
• Other clauses of partners can decide with mutual discussion

Step 3: Certificate of Registration

When the registrar is fully satisfied with the application process of registration and the documents required for the Partnership Registration, it will be registered in the Registrar of firms and issue the Certificate of Partnership. The registrar contains up-to-date information on all firms, and anybody can view it after making the payment of the given fees.

Step 4: Registration under Income tax and issuance of PAN

While conducting the Partnership Company registration process, a PAN card application has to be made with the Income tax department.

Step 5: GST Registration

An application shall be made with the GST department for registration depending upon the requirement of the business under the GST Act.

Step 6: Bank account opening

When all the steps of Registration process are completed, the current bank account must be opened by the partnership firm.

Imp Note- To download the Registration certificate - You can keep saving a copy of the certificate by visiting the Partnership Firm Registration govt website.

What are the Documents Required for Partnership Business?

The required documents for carrying out the Partnership Company registration process are as follows:

As Identity proof and address proof of the partners, any of the following two documents can be submitted:

• PAN card
• Passport
• Driver’s license
• Aadhar card
• Voters ID

Proof of the principal place of business is submitted in the following manner:

• Sale deed if one of the partners owns the office of the firm
• Rental agreement copies in case of rental property
• Copy of latest electricity bill

You can also download the registration of partnership firm pdf from google.

What are the key advantages of registering a Partnership firm?

The following are some of the key advantages of a partnership firm given below:

1. Easy to start – Partnership firms are easy to start with the only requirement of a partnership deed. Hence, the Partnership Company registration process can be completed in around one week.

2. Decision making– The Partnership has the benefit of making fast decisions as there is no need to pass resolutions. The partners can have a wide range of powers to undertake transactions on behalf of the partnership firm.

3. Raising of funds – It helps in raising funds easily as compared to a sole proprietorship business. The partners can go for banks and financial institutions for raising of money.

4. Pooling of resources – Another benefit of getting a Partnership Registration certificate is that the partners can pool their resources together. The resources can be financial and non-financial such as knowledge, years of experience, connections, and so on.

5. Sharing of Risk – In the Partnership Company registration process, the loss is shared individually by all the partners which reduce the burden and make the process at ease.

6. Ability to file a case against third parties – The partners of the firm can bring third parties to the court for the resolution of disputes arouse during the course of business.

7. Power to file suit against co-partners – When a dispute arises between the partners, the sharing of profits or any other matter regarding the operations of the firm. The unregistered partnership cannot enforce any clause of the partnership deed.

What are the Fees for Partnership Registration?

The partnership firm registration fees are chargeable by the registrar of the firm after carrying out the partnership company registration process. A registration fee and a stamp duty need to be paid at the time of submission of the documents to the registrar. The registration fee shall vary from one authority to another and also depend on the applicant’s profile, the nature of the business and the partner’s contribution. The Partnership firm registration online includes the following services

• PAN application
• Partnership deed drafting
• Filing of deed and other documents with Registrar
• Issuance of partnership registration certificate
• Completely online process

Closure Now...

The Partnership firm is a very popular form of business in India. There shall be two or more individuals joining together as partners for running and managing a firm while sharing profit and losses in a ratio. The Partnership Company registration process is done through the partnership deed which is signed and accepted by all the partners.

The Indian Partnership Act, 1932 is governing act for partnership firms and for issuing the Registration certificate of Partnership. There are many types of partnerships such as at-will, fixed-term partnerships, particular partnerships, etc. In this blog, we have understood the registration procedure, documents and advantages of the Partnership.