No, it is not necessary to register a partnership firm. Though if registered it offers certain benefits.

Minimum: 2
Maximum in case of Banking business: 10
Maximum in case of Other business: 20

An individual who is an Indian citizen and a resident of India can partner in a Partnership firm. Non-resident Indians and Individuals belonging to Indian Origin can invest in a Partnership only with the approval of the Government.

For the partners, it is necessary to submit a PAN card along with the identity and address proof. It is recommended to draft a Partnership Deed which is to be signed by all the Partners.

A Partnership firm can be started with any amount of capital. There is no minimum requirement as such.

The Partnership firm and the partners are the same in the eyes of the law. In Partnership firms, the liability of the Partners is also unlimited and all the Partners are said to be jointly and severally liable for the liabilities of the firm. Hence, No Partnership firm doesn’t have separate legal existence of its own.

A Partnership Firm must file the returns of Income irrespective of the number of profits or losses made by the Partners.

A Partnership deed is an agreement between the Partner that highlights the terms and the rules of the Partnership among the Partners.

The Partnership deed lays down all the Terms and Condition of the Partnerships. As it regulates the rights and duties of each partner. A Partnership deed is a very crucial document.

In the case of Partnerships, it is not necessary to prepare audited financial statements each year. However, a tax audit may be necessary based on turnover and other criteria.

Yes, there’s a specified procedure for converting a Partnership firm into a LLP or Company. However, the procedure is very cumbersome and time-consuming. It will be wise if an entrepreneur considers starting an LLP or a Company instead of a Partnership firm.

To open a bank account in the name of Partnership firm, a registered Partnership deed along with an identity proof and address proof of the Partner is to be provided.

Partnership firms are registered by the Registrar of Firms, under the Indian Partnership Act, 1932.

Only a registered Partnership firm can file a suit in any court against the firm or other partners for the enforcement of any right arising from a contract or right conferred by the Partnership Act. Also, only a Registered Partnership firm can claim a set off (i.e. mutual adjustment of debts owned by the disputant parties to one another) or other proceedings in a dispute with a third party. Hence, it is advisable for Partnership firms to get itself registered sooner or later.

If the Partnership firm is registered, the Partnership deed will be registered and a Registration Certificate will be issued by the Registrar of Firms.

There are restrictions on the transfer of ownership interest in a Partnership firm. A Partner cannot transfer his/her interest in the firm to any person (except to the existing partners) without the unanimous consent of all other partners.

Partnership firm will have to file their annual tax return with the Income Tax Department. Other tax filings like service tax filing or VAT/CST filing or GST filing may be necessary from time to time, based on the business activity performed. However, annual report or accounts need not be filed with the Ministry or Corporate Affairs, which is required for Limited Liability Partnerships and Companies.

To confirm the validity of the partnership deed, the partners must pay stamp duty required as per the capital of the firm. The amount of stamp duty payable depends on the amount of capital contribution by partners. The rate of duty is prescribed under State Stamp Act and which is different for every State.

Yes, notary on Partnership Deed is necessary in every case for an unregistered or registered partnership firm.

Applying for the PAN and TAN is possible after the execution of a Partnership Firm Agreement or after partnership deed registration with respected Registrar of Firms (RoF). The physical copy of the PAN will be received at the registered Business Place only after being dispatched by the Income Tax Department.

ComplianceIndia will understand your business requirements and help you start a Partnership firm by drafting the Partnership deed. Based on the requirements, ComplianceIndia can also help register the Partnership deed with the relevant Authorities to make the Partnership Firm a Registered Partnership firm.

ComplianceIndia can incorporate a Partnership Firm in 6-8 working days. The time taken for registration will depend on submission of relevant documents by the client and speed of Government Approvals. To ensure speedy registration, please ensure you have all the required documents prior to starting the registration process.