Overview

A partnership is one of the most preferred types of business entity in which two or more than two people come together to set up a business with the air of earning profit.  A successful registration gives a separate identity to your business and make partnership firm able to conduct business operations in organised and structured manner.

Partnership registration is done under the Indian Partnership Act 1932, in order to establish a partnership firm, partners must be agreed on the terms and conditions of the partnership and build a partnership deed. Partnership deep is a kind of legal document that holds rights, responsibilities and obligations of each partner. 

Partnership deed contains various information of the business and partners, such as name and address of firm, name and address of partners, nature of business, duration of the partnership, capital contribution, profit and sharing ratio, and terms of dissolution. If you have a requirement for partnership registration in India then you are at right platform, here we will discuss its registration process, documents and importance.

Why

However, registration of partnership is not mandatory under Partnership Act in India, but CRSPL suggests you to register your partnership firms, as it is necessary and has its own significant advantage of registration as follows: - 

•  In case any issue occurs, partner is eligible to sue other Partner/partners or firm, as per rights of registered partnership, but in case of unregistered partnership, partner can not sue other partner, firm or third party.
•  Partnership firm can file case in case of any dispute against third party but if partnership is not registered then it cannot be done.
•  Registered partnership firm can claim tax benefits, deduction and also claim set-off for proceedings matters.

Process

1. Select name of a partnership firm: - Partners must select a unique and suitable name as per their business nature, which is not already used by any other business entity. Also, the name must not contain terms like Emperor, Empress, Crown, Empire or the terms indicating the approval of the Government, sanction only if the State Government signifies its consent in writing to the acceptance of such words as part of the name of the partnership firm.

2. Build a partnership deed: - Create a partnership deed that outlines all the terms and conditions of partnership including nature of the business, capital contribution, profit sharing ratio, right and responsibilities of partners, Rules and Regulations in case of retirement, death and admission of a partner, Interest on Partners’ Loan, Partner’s Capital and Interest, if any.

3. Obtain PAN card and address proof : - Partners must have government-issued documents such as PAN card Aadhaar card, voter ID card and driving license.

4. Obtain NOC from the landlord (if applicable): - If a partnership firm is rented, then partners must take NOC from landlord allowing them to use the property.

6. File application for partnership firm registration: -  An application form (Form 1) has to be filed to the Registrar of Firms of the State in which the firm is situated along with prescribed fees

8. Obtain registration of certificate:- After successful submission of application, registrar will verify the details and issue a Registration Certificate.

9. Obtain required license and permits (if applicable): - According to the nature of the business, partners may require other registration or licenses such as professional tax registration and shop and establishment registration.

Documents

•  Application for registration of partnership (Form 1)
•  Partnership Deed
•  Affidavit certifying all the details mentioned in the partnership deed and documents are correct.
•  PAN Card of partners 
•  Address Proof of partners and firm
•  Ownership documents or rental/lease agreement along with a utility bill
•  NOC from Landlord
•  Photographs of partners

Fees

Government Fee (Stamp Duty) and Professional Fee.

Timeline

Generally, it takes 15 to 20 working days to register a partnership firm in India, something time can vary as it also depends on state to state registration process.

FAQs