What is the Process of Partnership Firm Registration?

Partnership Firm is the most preferred structure of doing business, especially for a medium-scale business. Group of persons joined together to form a partnership firm to work together on mutual terms for carrying the objectives of the firm and to share the profit and loss of the firm on an agreed ratio.

Registration of partnership firm is not mandatory; however, it is advisable to get it registered for providing its legal existence. Partnership Deed is the mandatory requirement to register the partnership firm in India. Partnership in India is governed and regulated under Indian Partnership Act 1932. However, as per the Companies Act, minimum members required to form a partnership firm are two and maximum cannot exceed 100. In this blog, we will learn about Partnership and Partnership firm Registration Process in brief.

Following are the characteristics of Partnership Firm for better understanding the concept:

• The partnership is formed based on an agreement between the partners. Terms and condition that governs the partnership are outlined in an agreement known as Partnership Deed.
• A partnership can be formed to carry on business activities such as trade, industry or profession.
• Partner is entitled to share the profit and loss as per the agreed ratio
• Each partner act upon himself being the principal owner. Also, the partner can act as an agent for other partners to act on behalf of them
• The liability of all the members is unlimited for all the losses or debt incurred in the operation of the business.
• The partnership continues as per the discretion of the partners. However, in case of the partnership of only 2 partners, the partnership comes to an end if any partner dies, becomes insolvent or retires.

Registration of partnership is not compulsory; it is as per the total discretion of partners to get it registered or not. Partnership Act lays down the provisions for Partnership Firm Registration Online as follows:

• The applicant can apply in Form 1 for registration of partnership firm to the registrar of the concerned state where the partnership is to be registered. The application must contain the full detail about the firm and its partners such as: 

1. Name of the firm
2. Name and address of all the partners 
3. The registered address of the firm 
4. Duration of firm
5. Date of forming the firm

•  After the registrar receives the application, it shall verify the same for its correctness and shall ensure the application adheres to the provisions of the act.
• Once the registrar is satisfied, it shall grant the registration certificate to such a partnership.
• Finally, the registrar will make an entry in its register of firms in a particular state. The date of registration of the firm is the same on which registrar records and files the statement on its register.
• Partners shall apply for the PAN card of the firm once it is registered to give the firm legal existence.
• After receiving the PAN Card and registration certificate, the partner can approach the banks for the opening of the Current Account in the name of the firm.

Following category of documents required to be annexed with application to the registrar:

• Application in Form 1
• PAN and Aadhar of all partners
• Supporting document for address proof of its registered office such as NOC from the landlord, rent agreement, electricity bill, registry, etc.
• Duly filed an affidavit signed by all partners
• A certified copy of Partnership Deed created on stamp paper as applicable to a particular state.

There occur circumstances where the entrepreneur doesn't have the requisite fund for investment, or the nature of business is such that requires the supervision and control of more than one person. In these scenarios, the formation of a Partnership is preferred over Sole-Proprietorship or structures with sole-owner. Our team of experts provides services relating to the preparation of partnership deed or getting the hustle-free registration for your firm.