Simply put, a Partnership is an agreement between two or more people or parties to collaborate on a single project. A partnership firm, then, is a business that consists of at least two people who come together to conduct business according to predetermined conditions. A partnership deed outlines the terms and conditions of these businesses. online registration of partnership firm registration fees.
What is a Partnership Firm?
A partnership firm is a suitable form of the business structure due to low cost, ease of setting up, and minimal compliance requirements.
A Partnership firm is a collective form of working amongst individuals called partners.
Main features of a Partnership Firm
- A partnership firm is a widely used business structure in India with the following key features:
- Minimum requirements of persons
- Easy to set up partnership firm
- Minimal legal formalities
- Flexibility in operations and decision
Documents Required for Partnership Registration
- Form-1 for applying registration of Partnership Firm
- Certified Copy of notarized Partnership Deed on stamp paper
- Specimen copy of Affidavit declaring intent to become a partner
- Ownership documents in case property are owned.
- If the property is on rent, then the rental agreement is proof of principal place of business.
- Identity Proof and address proof of all the partners (PAN/ Aadhar/ Driving License/ Voter ID card/ Passport)
What is a Partnership Deed?
A Partnership Deed is an agreement that sets the terms and conditions between the various parties involved in a partnership.
- The firm’s current or future business ventures
- The length of time the partnership will last Information about the partners, such as their names and addresses
- The partnership’s name is
- The day on which the company began operating.
- Investments made by each of the firm’s partners
- The profit and loss ratio will be shared among the partners.
- The norms and regulations governing partner removal and intake.
- Partners’ responsibilities and obligations
- The type of collaboration
- A partnership firm is ideal for which type of business
Advantages of a Partnership
- Easy Formation: Formation of Partnership Firm is easy, and further the registration of Partnership Firm is not compulsory
- Name Selection: It is advised to get a trademark of the name chosen for a Partnership Firm; otherwise, another person may also use the same name for his company.
- Compliances and Regulations: The annual and event-based compliance and regulations to run a business are considerably less in the case of a Partnership Firm than a Company or LLP. Also, there is no requirement of Annual returns & statutory audit by the registrar of firms.
- Flexibility in operation: Due to the limited number of partners, there is flexibility in the operations of a business and a faster decision-making process.
- Sharing of Risk: In partnership, every partner bears the risks individually as it is easier than a sole proprietorship.
FAQ’s
What is a partnership firm?
When two or more people form a partnership firm, they do so in accordance with the terms and objectives outlined in a partnership deed, which may or may not be registered.
Is a partnership firm a separate entity?
Partnership firms are owned by the partners, who are not a separate legal entity from the firm. If the company runs into legal trouble or accumulates debt, it is the owners’ responsibility.
How many partners can there be?
There must be a minimum of two partners in a partnership. A banking partnership firm can have up to 10 partners, while any other business partnership can have up to 20 partners. Profits and losses can be divided equally or unequally between the partners, depending on their agreement.
How much time does it take to register a partnership firm?
There are 10 to 12 working days required to register an Indian partnership firm. The time it takes to issue an incorporation certificate, on the other hand, may differ based on state regulations. The time it takes the government to process a partnership firm registration application varies by state.
What are the minimum and the maximum number of partners required for the formation of partnership firms in India?
A partnership firm requires a minimum of two people and a maximum of twenty.
Who can be the partners in a partnership firm?
Individuals who reside in India can only join a partnership firm as partners or members. Private limited companies are an option for foreign entrepreneurs looking to set up shop in India.
What is the capital amount needed for the partnership firm registration in India?
In India, there is no requirement for a partnership firm to have a specific amount of capital to be registered.
Are there any grounds on which my partnership can be invalid?
If a partnership agreement isn’t registered, the court may rule that the partnership is voidable. The court may declare the partnership invalid and dissolve it if the business’s goal is illegal.
What is the scope of liability when it comes to partnerships?
During the course of business, every partner is jointly and severally liable for the firm’s acts and activities. In the event of an injury or loss to a third party, all partners will be held liable, even if one of the partners was the cause of the injury or loss.
How can SattvaCFO help in Partnership Firm Registration in India?
SattvaCFO has years of experience in Partnership Firm registration. All you need to do is call us or email us for hassle-free Partnership Firm registration in India. online registration of partnership firm registration fees.
