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    Partnership Firm

    A Partnership Firm is a popular form of business constitution for businesses that are owned, managed and controlled by an Association of People for profit. Partnership Firms are governed under Partnership Act, 1932. Partnership firms are relatively easy to start and is prevalent amongst small and medium sized businesses in the unorganized sectors. With the introduction of Limited Liability Partnerships in India, Partnership Firms are fast losing their prevalence due to the added advantages offered by a Limited Liability Partnership.

     

    There are two types of Partnership firms, registered and un-registered Partnership firm. It is not compulsory to register a Partnership firm; however, it is advisable to register a Partnership firm due to the added advantages. Partnership firms are created by drafting a Partnership deed amongst the Partners to own and manage the business.

     

    ComplianceIndia can be your legal and professional partner in India to help you understand how to register Partnership Firm in India quickly and cost-effectively.

    Advantages of Partnership Firm

    Easy to Start

    Easy to Start

    Minimum Compliance requirement

    Minimum Compliance requirement

    Relatively Inexpensive

    Relatively Inexpensive

    Annual filing not required

    Annual filing not required

    Shared Responsibilities among Partners

    Shared Responsibilities among Partners

    Operating Flexibility

    Operating Flexibility

    Pre-defined Object or Period

    Pre-defined Object or Period

    Various Financial Returns to the Partners

    Various Financial Returns to the Partners

    Eligibility to form a Partnership Firm

    – Atleast Two Partners required to form an Partnership Firm
    – Partnership Deed [Signed by all Partners]

    How we Work?

    Step 1

    Fill-up our Contact Form and Submit

    Step 2

    Our Expert/ Legal Professional will contact you and provide brief guidance into the related context

    Step 3

    All Required Documents and Details to be provided as discussed with our Expert

    Step 4

    Our Expert will start Drafting of required documents and will send for review and Confirmation from Partners.

    Step 5

    Payment of Stamp Duty on Partnership Agreement and Notarised the same

    Step 6

    Application for PAN and TAN Registration

    Step 7

    Registration of Partnership Agreement, if subscribed

    Step 8

    Certificate of Registration of Partnership Firm

    Packages

    Consultation Charges

    Nil

    Complete assistance by Experts or Professionals indicating Process, Documents required, Benefits, Tax compliance, Legal Compliance, etc.

    Basic Plan

    Rs. 5,999/- only

    • – Partnership Deed
    • – GST Registration
    • – Account Book-Keeping
    • – Registration of your Partnership Firm
    • – PAN and TAN Registration
    • – Expert advice from Experts/ Legal Professionals

    Advance Plan

    Rs. 9,999/- only

    • – Partnership Deed
    • – Stamp Paper Purchase
    • – GST Registration
    • – Account Book-Keeping
    • – Ledgers Keeping
    • – Registration of your Partnership Firm
    • – PAN and TAN Registration
    • – 3 months GST Return filing
    • – Current Account Opening in your nearest Branch
    • – Expert advice from Experts/ Legal Professionals

    Ultimate Plan

    Rs. 14,999/- only

    • – Partnership Deed
    • – Stamp Paper Purchase
    • – GST Registration
    • – Account Book-Keeping
    • – Ledgers Keeping
    • – Registration of your Partnership Firm
    • – PAN and TAN Registration
    • – 6 months GST Return filing
    • – Current Account Opening in your nearest Branch
    • – Legal Drafting of documents
    • – Expert advice from Experts/ Legal Professionals

    Documents Required for Partnership Firm Registration

    PAN card

    A self-attested copy of PAN card of all Partners

    Partners Identity Proof

    A self-attested copy of Aadhaar Card/ Voter ID/ Passport/ Driving License of all Partners.

    Partners Address Proof

    A self-attested copy of Aadhaar Card/ Voter ID/ Passport/ Driving License or Bank Statement/ Utility Bills not older than 2 Months of all Partners.

    Office Address Proof

    Copy of Electricity bill or Sale Deed or rent agreement and latest self- attested electricity bill in case of rented accommodation not older than 2 months.

    Business Activity

    Description of main business activity intended to perform

    NOC from owner

    No Objection Certificate to be obtained from the owner(s) of registered office.

    Comparison with other forms of Business

    Form of Business Partnership Firm Private Limited Company One Person Company Limited Liability Partnership Proprietorship Firm
    Act Indian Partnership Act, 1932 Companies Act, 2013 Companies Act, 2013 Limited Liability Partnership Act, 2008 No specified Act
    Registration Requirement Optional Mandatory Mandatory Mandatory No
    Minimum Number of members 2 2 Only 1 2 Only 1
    Maximum Number of Members 50 No Limit Unlimited
    Number of Directors/Partners 2 – Unlimited 2 – 15 Only 1 2 – Unlimited Only 1
    Separate Legal Entity No Yes Yes Yes No
    Liability Protection Unlimited Limited Limited Limited Unlimited
    Statutory Audit Not Mandatory Mandatory Mandatory Dependent Not Mandatory
    Ownership Transfer ability No Restricted No Yes No
    Uninterrupted Existence No Yes Yes Yes No
    Foreign Participation Not Allowed Allowed Not Allowed Allowed Allowed
    Tax Rates High Moderate Moderate High Low
    Statutory Compliance Less High Moderate Moderate Less
    GET STARTED KNOW MORE KNOW MORE KNOW MORE KNOW MORE

    Frequently Asked Questions

    1. Is it necessary to register a partnership firm?

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

    2. How many partners can be there?

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

    3. Who can be a Partner in a Partnership Firm?

    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.

    4. What Documents are required to register a Partnership Firm?

    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.

    5. How much capital is required to start a Partnership Firm?

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

    6. Is a Partnership Firm a Separate Legal Entity?

    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.

    7. Is it compulsory to file Income Tax Return by Partnership Firm?

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

    8. What is Partnership Deed?

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

    9. Why is Partnership Deed necessary?

    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.

    10. Is audit required in case of Partnership Firm?

    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.

    11. Can Partnership Firm be converted into a LLP or Company?

    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.

    12. How to open a Bank Account in Name of 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.

    13. Who will register a Partnership firm?

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

    14. What are the advantages of a Registered Partnership firm?

    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.

    15. Will my Partnership firm have a Certificate of Incorporation or Registration?

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

    16. How can I transfer my Partnership firm?

    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.

    17. What are the annual compliance requirements for a Partnership?

    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.

    18. What is the amount of Stamp duty payable on Partnership Deed?

    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.

    19. Whether the notarisation of the Partnership Deed is necessary?

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

    20. When can the partnership firm apply for PAN and TAN?

    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.

    21. How will ComplianceIndia help me start a Partnership firm?

    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.

    22. How much time does it take to incorporate a 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.

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