Want to register Partnership Firm in India?
Don’t know how to register Partnership Firm In India?
This article will give you in-detail information about Partnership Firm Registration In India, the Partnership firm registration process and procedure, Documents required & Benefits of forming Partnership Firm.
Partnership Firm in the simplest term means the partners agree to share profits among each other. The term ‘partners’ can be businesses, organizations, individuals, governments or both. It cannot be formed by the ‘single person’.
Partnership Firm is relatively easy to form and is popular among the small businesses and medium-sized businesses in unorganized sectors due to
Due to the emergence of Limited Liability Partnership, the Partnership Firm is slowly losing its hold in India.
Mostly Hostels, Bakeries, restaurants, construction type of industry goes into
Is it necessary to register a Partnership Firm In India?
It is not necessary to register Partnership Firm in India and there are no
How To Register Partnership Firm In India
The procedure to register the Partnership Firm is easy. Follow these complete step by step procedure in the article and you can form your Partnership Firm very easily.
Step 1: Name Selection:
A name is selected in such a way that it does not infringe upon Trademark of any other company. For this reason, it is checked with the Trademark Department. The name is not
Step 2: Drafting of Partnership Deed
To register Partnership Firm In India, drafting of Partnership Deed is not compulsory but it is recommended to prove the existence of the firm.
Partnership Deed is a legal agreement which should contain information related to the matters such as:
- Name and Place of the business
- Commencement and duration
- Nature of business
- Capital of Partners
- Loans and advances
- Remuneration to Partners
- Interest to Partners
- Share in
netProfit or Loss
- Duration of Partnership and Notice time
- Determent of Partners
- Sales of Partnership Interest
- Funds and Bank accounts
- Drawings and withdrawals
- Books of accounts
- Accounting Year
- Personal Debts and Liabilities
- Right and Obligations
- Settlement of Dispute
- Expelling a Partner
Partnership Deed is created on the stamp paper. Partnership Deed can be in the form of the oral or written document. The mostly Written document is preferred. Each partner should have a copy of each Partnership Deed.
Remuneration to Partners in Partnership firm Registration In India
Maximum Salaries allowable to Partners if book profit is negative is 1,50,000.
If book profit is positive then Rs 1,50,000 or 90% of book profit whichever is higher.
If book profit is positive and more than 3 Lakhs, then
2, 70,000 salary is allowable on first 3 Lakh of book profit + 60% of the remaining amount.
Following are the advantages of Partnership Deed:
- It helps to avoid dispute among the partners since it contains detailed information which can be easily referred to.
- Clearly specifies the duties and policies of each partner.
- Partnership Deed is a legal binding document.
Step 3: Notary Of Partnership Deed
The deed is notarized on Non-Judicial Stamp Paper minimum of Rs 500 and Signature of the partners is made on the agreement in the presence of witnesses before a Notary Public.
Step 4: Submit To Register of Firms
You need to submit documents to Registrar of
Step 5: Incorporation Certificate From Register of Firms
Then, Registrar of Firm will send Incorporation Certificate on the address of the firm specified in Partnership Deed.
Note: PAN Card is compulsory irrespective of Partnership Firm registration is done or not. With the help of Partnership Deed, PAN Card can be applied.
Your Registration of Partnership Firm In India is now complete.
Documents required to register Partnership Firm In India
- Address proof of partners
- Photo ID proof of partners
- No objection certificate from the owner
- Ownership proof
- Rent agreement of your registered office
Advantages of Registration of Partnership Firm
- Easy To Start
Registration of Partnership Firm in India is easy to start as the requirements are less compared to other structure like Limited Liability Partnership or Private Limited Company.
- Risk Sharing
In the Partnership Firm, the risks are equally shared among the partners.
Flexibility in case of Partnership Firm is easy because it involves
- Easy closure
Most of the legal structure company closure procedure is long. But in case of closure of Partnership Firm, it is very simple.
- Annual Filings
In case of Partnership you are not require to do annual filing like Private Limited Company & LLP. You just need to submit the documents to Registrar of Firms.
FAQ’s on How to Register Partnership Firm In India
Q.1 What are the prerequisites for starting a Partnership Firm in India?
To register Partnership Firm In India, the minimum number of partners need to be two, whereas the maximum number of partners is 20.
Q.2 What are the types of Partnership Firm In India?
There are two types of Partnership Firm In India registered and unregistered. The unregistered Firm is not registered with
Registrar of Firm. And the registered Firm is registered with Registrar of Firm.
The application for registration of the P
The stamp duty on the partnership deed varies from state to state and depends on the capital of the firm.
Notary Deed is an essential requirement for the partnership registration.
Unlike the Limited Company or LLP, there is no need to file the annual return for a partnership firm. There is no provision in Partnership Firm where the audit is required. However, if the turnover crosses 2 crores, then you will need to file the annual return.
Income Tax Return is necessary to be submitted within the end of the Financial Year and within the Due Date of filing.
In order to check your Partnership Firm Registration Number, you will need to inquiry at Registrar of Firm.
In order to register Partnership Firm In India, the process and procedure is simple. However it is recommended to take help the Professional Chartered Accountant who can help in Partnership registration process.
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