General Partnership Firm Registration
Complete Solution - Documentation, Filing, Approval
A partnership is defined as the relation between persons who have agreed to share the profits of a business carried on by all or any of them acting for all. The only requirement for starting a partnership firm in most cases is a Partnership deed. The Partnership in India is governed by Partnership Act 1932.
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How to Register a General Partnership Firm / Company?
You can Register a General Partnership Firm / Company in Three Easy Steps
Name Approval
We need a specific Name for registering a General Partnership Form / Company, We help you choose the name will all formality checks.
Submission of Documents
We need some specific documents for registered office address and KYC documents of proposed Directors.
Approval
After getting the Company Incorporation, PAN & TAN Approval, we guide you for better tax and compliance management.
General Overview
Types of Partnerships
Advantages
Documents Required
Registration Process
General Overview
Overview – Concept
In India, we have a definite law that covers all aspects and functioning of a partnership, The Indian Partnership Act 1932. The act also defines a partnership as “the relation between two or more persons who have agreed to share the profits from a business carried on by either all of them or any of them on behalf of/acting for all”.So in such a case two or more (maximum numbers will differ according to the business being carried) persons come together as a unit to achieve some common objective. And the profits earned in pursuit of this objective will be shared amongst themselves. The entity is collectively called a “Partnership Firm” and all the individual members are the “Partners”.
Types of Partnerships
What are the types of Partnership Firm
There are two types of partnership firms, Registered or Unregistered partnership firms. It is not compulsory to register a partnership firm; however, it is advisable to register a partnership firm due to added advantage like:
• A partnership is easy to form as no cumbersome legal formalities are involved.
• A partnership firm is not required to file its annual account with their Registrar each year unlike a Limited Liability Partnership or Company.
• Bank account can be opened in the name of a partnership firm.
• A partnership firm can be registered either at the time of its formation of even subsequently.
An unregistered partnership firms have certain rights denied in Section 69 of the Partnership Act, which deals with the effects of non-registration of a partnership firm. Some of the disadvantages of an unregistered firm are:
• A partnership is easy to form as no cumbersome legal formalities are involved.
• A partnership firm is not required to file its annual account with their Registrar each year unlike a Limited Liability Partnership or Company.
• Bank account can be opened in the name of a partnership firm.
• A partnership firm can be registered either at the time of its formation of even subsequently.
An unregistered partnership firms have certain rights denied in Section 69 of the Partnership Act, which deals with the effects of non-registration of a partnership firm. Some of the disadvantages of an unregistered firm are:
- A partner of an unregistered firm cannot 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.
- No suit to enforce a right arising from an agreement can be instituted in any Court by or on behalf of a firm against any third party unless the firm is registered.
- An unregistered firm or any of its partners cannot claim set-off or other proceedings in a dispute with a third party.
Advantages
Advantages of Partnership Firm
Registered/unregistered Partnership Firms are not required to file any annual returns, and the financial statements of a partnership firm would NOT be made publicly available. Also, the accounts of a registered / unregistered partnership firm are not required to be audited. Following ar the general advantages of a Partnership firm
1. Easy Formation : Registration is not compulsory in the case of Partnership firm. It can be formed without any legal formality and expenses. Thus they are simple and economical to form and operate.
2. Larger Resources : Due the more number of members the partnership firm has larger resources for the business operations as compared to sole proprietorship.
3. Flexibility in operation : Due to the limited number of partners there is flexibility in the operations of business as the partners can amend any objectives or change any operations any time by mutual consent.
4. Better Management : Business of a partnership firm is very well managed by all the partners as they take interest in the daily affairs of business because of the ownership, profit and control.
5. Sharing of Risk : In partnership every partner bears the risks individually as it is easier compared to sole proprietorship.
1. Easy Formation : Registration is not compulsory in the case of Partnership firm. It can be formed without any legal formality and expenses. Thus they are simple and economical to form and operate.
2. Larger Resources : Due the more number of members the partnership firm has larger resources for the business operations as compared to sole proprietorship.
3. Flexibility in operation : Due to the limited number of partners there is flexibility in the operations of business as the partners can amend any objectives or change any operations any time by mutual consent.
4. Better Management : Business of a partnership firm is very well managed by all the partners as they take interest in the daily affairs of business because of the ownership, profit and control.
5. Sharing of Risk : In partnership every partner bears the risks individually as it is easier compared to sole proprietorship.
Documents Required
Docs and Information Required Partnership Deed
The application for registration of Partnership Firm must contain the prescribed registration form for registration , identity proof/address proof of Partners, certified a true copy of the Partnership deed entered into and proof of the principal place of business.
As identity and address proof of the Partners, any of the following two documents can be submitted:
- PAN Card
- Passport
- Drivers License
- Aadhar Card
- Voters ID
Proof of the principal place of business can be established by submitting the following documents:
- Sale deed in case one of the Partner owns the place of business
- Rental agreement copy if the premises are rented
- Copy of latest electricity bill or water bill or property tax receipt
Following details are also required for drafting a Partnership Deed:
- Name and address of the firm and all the partners
- Nature of business
- Date of starting of business Capital to be contributed by each partner
- Capital to be contributed by each partner
- Profit/loss sharing ratio among the partners
- Interest on capital invested, drawings by partners or any loans provided by partners to firm
- Salaries, commissions or any other amount to be payable to partners
- Rights of each partner, including additional rights to be enjoyed by the active partners
- Duties and obligations of all partners
- Adjustments or processes to be followed on account of retirement or death of a partner or dissolution of firm.
- Other clauses as partners may decide by mutual discussion
Registration Process
Process of Registration
At Call CA,we can help you register a partnership firm anywhere in India in seven working days. At the beginning of the process , One of our team member will brief you about the process and provide you with a list of documents required for registration of partnership firm. You can submit the information and documents required through an e mail. Once, the documents and information are verified, a partnership deed will be drafted and sent to the Partners. All the Partners must sign the document on stamp paper and share us the scanned copy over e mail. Once, the signed partnership deed is available; it is registered with the concerned Registrar of Firms and Certificate of Registration of Partnership Firm is provided.
Frequently Asked Questions
The registration of Partnership Firm in India can take up to 12 working days. The time taken to get a certificate of registration may differ as per the regulations of the subjected state. The registration of Partnership Firm is subject to Government processing time which differs for each State.
There is no limit on the minimum capital for starting a Partnership firm. Therefore, a Partnership firm can be started with any amount of minimum capital.
The Partner must be an Indian citizen and a Resident of India. Non-Resident Indians and Persons of Indian Origin can only invest in a Partnership with prior approval of the Government of India.
No, a Partnership firm has no separate legal existence of its own i.e., the Partnership firm and the partners are one and the same in the eyes of law.
Liability of the Partners is unlimited, and the partners are said to be jointly and severally liable for the liabilities of the firm. This means that if the assets and property of the firm is insufficient to meet the debts of the firm, the creditors can recover their loans from the personal property of the individual partners.
It is not necessary for Partnerships to prepare audited financial statements each year. However, a tax audit as per Income Tax Act may be necessary based on turnover
Yes, there are procedures for converting a Partnership business into a Company or a LLP at a later date. However, the procedures to convert a Partnership firm into a Company or LLP is expensive and time-consuming.
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