Partnership Firm Registration: Complete Guide

What is Partnership Business?

A Partnership Business is a Business Structure where two or more individuals come together to run a business. The most famous advantage of this business structure is to work with different expertise partners. However, the profit and loss of the business is divided between the partners depending on their Profit Sharing Ratio.

Documents Required to Start Partnership Business

Following is the list of documents required to start a Partnership Firm in India:

• 1. Partnership Deed: A written agreement signed by all the partners including their roles & responsibilities, profit sharing ratio, etc.
• 2. Identity Proof: Identity Proof of all the Partners are required such as PAN Card, Aadhaar Card, etc.
• 3. Address Proof: Address Proof of all the partners is required. It can be any utility bill not older than 2 months. It can be any Electricity Bill, Water bill, Telephone Bill, etc.
• 4. Affidavit from: Affidavit from all partners affirming that all provided information is true to their knowledge.

Partnership Registration Process

In order to register a Partnership Firm in India, individual required to follow certain steps:

• Step 01: Application for Registration: In order to register a Partnership Firm, Form 1 is required to be filed to the Registrar of Firms for the state in which the partnership firm will operate. This form needs to be verified and signed by all the partners or by the agents on partners behalf. This form includes details the following:
  • Name of the firm
  • Address of the Firm where it commenced the business
  • Any Substitute location where the business will take place
  • Joining Date of each partner
  • Name of each partner
  • Residential Address of each partner

  Note: This Application can be shared to the Registrar of Firms either by a post or physical delivery.

• Step 02: Name Selection for Partnership Firm: Next, Partners need to choose a name for their Partnership Firm which can replicate their business operations. While choosing the name for your Partnership Firm, make sure the name of the firm is not similar to any existing Partnership Firm. However, there are no restrictions for selecting the name of the Partnership Firm but there are some words which should be avoided in the name of the Partnership Firm. These words include emperor, crown, empress, empire or any other words which show sanction or approval of the Government.
• Step 03: Draft Partnership Deed: Once you choose the name for the Partnership Firm, then you need to draft a Partnership Deed. This Partnership Deed includes all the details related to the Partnership Firm including the Rules & Responsibilities, Duties, Profit Sharing Ratio, of all the Partners. This Partnership Deed helps in avoiding future Conflict, so it is better to read the deed carefully before signing.
• Step 04: Certificate of Registration: After submitting the application, the Registrar will verify all the documents, details & Partnership Deed and on successful verification, he/she will register your Partnership firm in the list of Registrar of Firms and you’ll get the Certificate of Registration.

Who is Eligible to Become Partner in a Partnership Firm?

In order to become a Partner in a Partnership Firm, there are certain eligibility criteria which need to be followed for a legal recognition. Following is the list who is eligible to become a Partner in Partnership Firm:

• 1. Individual: Any individual who is not a minor and not disqualified by law to enter any contract is eligible for Partnership Registration.
• 2. Firm: A legal registered Partnership Firm is eligible to become a Partner in a Partnership Firm.
• 3. Company: A Company is considered as a separate individual and thus it is eligible to become a partner in a Partnership Firm.
• 4. Trust: Any Trust either Religious or Family trust is eligible to become a Partner in a Partnership Firm if their constitution allows.
• 5. Hindu Undivided Families (HUFs): The karta of a HUF is eligible to become a Partner in a Partnership Firm.

Time Taken to Register Partnership Firm

The registration process of a partnership firm usually takes around a week i.e, 7 working days, which includes the collection of required information, drafting the partnership deed, and getting it notarized. However, the approval can take more time due to delay by the government.

Why Choose RegisterAdda?

RegisterAdda is one of the top rated accounting firms which is considered as the most recommendable company for your Partnership Firm Registration. RegisterAdda has a team of experienced professionals who not only have experience in the registration of the partnership firms but also have expertise in various other business domains. They will ensure the whole process will be easy and smooth. Register Your Partnership Firm with RegisterAdda Now!

Frequently Asked Questions (FAQs)

1. What is a Partnership Firm?
When two or more people decide to do a business together with the intention of sharing profit and loss, in particular the ratio is called a partnership firm.

2. What are the documents required for partnership firm registration?
In order to do partnership firm registration in India one needs to have identity proof of all the partners, registered business address proof, partnership deed, etc.

3. Is registration of partnership firms compulsory?
No, as per the partnership laws in India it is not at all mandatory or necessary to do Partnership Firm Registration in India.

4. Can a Trust become a Partner in a Partnership Firm?
Yes, a Religious or family trust can become a partner in a Partnership Firm if their constitution allows.