Partnership Registration Simplified: Your Essential Guide to Forming a Successful Business

Explore the comprehensive guide to partnership registration in India. Understand the benefits of registering your partnership firm, including legal recognition and protection against disputes. Learn the step-by-step process, from choosing the type of partnership to drafting a partnership deed and filing with the registrar. Discover post-registration compliance requirements to maintain proper records and adapt to changing business needs. Ensure your partnership firm operates efficiently and legally in today's competitive landscape.
A diverse group of business partners discussing partnership registration over documents.

INTRODUCTION

A Partnership firm, as defined under the Indian Partnership Act, 1932 (for brevity, The Act) refers to two or more persons (but 20 or less), who have come together with the intention to conduct some business and have agreed to share the profits of said business carried on by all or any of them acting for all. Such an arrangement has a plethora of advantages ranging from financial benefits such as tax benefits and shared capital rising to psychological benefits such as enhanced motivation and shared responsibility. And while registering a partnership firm is an optional task and may seem intimidating without proper guidance, a non-registered partnership firm is as good as none. 

REGISTRATION OF A PARTNERSHIP FIRM

The registration of a partnership firm entails the process of filing the documentation required for proving the existence of the firm with the registrar of firms so as to grant legal recognition to said firm. The Act provides for the registration of firms in Chapter VIII, with provisions governing the application to be sent to the registrar, contents thereof and so on.  

WHY REGISTER YOUR PARTNERSHIP FIRM?

While registering a partnership firm is an optional exercise, the same yields benefits involving legal disputes, as enumerated in Section 69 of the Act, as have been below mentioned: 

  1. Suit against firm by partner to a firm: The partners of a non-registered firm shall not be able to file suit for the enforcement of any right arising from a contract, of conferred by the Act, in any court by or on behalf of any person suing as a partner in a firm against the firm or any person alleged to be or to have been a partner. 
  2. Suit by firm against third party: a non-registered firm and partners thereof, shall not be able to file suit against any third party so as to enforce any right arising from a contract, in any Court. 
  3. Set-off claims: the above mentioned clauses further also apply to any set-off claims arising from a contract, so long as the same do not constitute enforcement of the right to sue for dissolution and ancillary matters. 

PROCESS OF REGISTRATION OF PARTNERSHIP FORM

The registration of a firm may be affected at any time by uploading on the website following statement in the prescribed online form and accompanied with prescribed fees to the competent Registrar. Now that the need of registration has been underscored, let us walk through the process of registration. 

1) Choosing the Type of Partnership: at the initial stages, it is necessary that the firm decide amongst various kinds of partnerships as per its needs and goals, common types being General partnership, Limited Partnership (LP), Limited Liability Partnership (LLP). 

2) Drafting the Partnership Deed: A partnership deed is an agreement amongst partners, containing the terms and conditions of the functional and structural aspects of the firm, with details regarding partnership name, profit sharing ratios, business nature and such. With the existence of such a deed, dispute resolution and account settlement becomes easier and far clearer.  

3) Obtaining PAN and TAN: for taxation purposes, it is required that the firm acquire a Permanent Account Number (PAN) and a Tax Deduction and Collection Account Number (TAN) for the accounts of the firm. 

4) Filing with the Registrar of Firms: the same is done by filing an application for registration with the registrar of firms in the area an in which any place of business of the firm is situated or proposed to be situated, and the said application is to entail the following heads, as has been provide in Section 58 of the Act:

    (a) The firm name,

    (b) The place or principal place of business of the firm,

    (c) The names of any other places where the firm carries on business, 

    (d) The date when each partner joined the firm,

    (e) The names in full and permanent addresses of the partners, and 

    (f) The duration of the film.

    The statement shall be digitally signed by all the partners or by their agents specially authorized in this behalf. Along with the aforesaid, applicant, signing the statement shall also upload to the website, verifying the statement recorded in the online format mentioned above, affixed to an affidavit certified by a Notary on the non-judicial stamp paper. 

    If the registrar of the firms is satisfied with due compliance of aforesaid, under section 59 of the Act, shall record an entry of statement in a register called the Register of Firms, and shall file the statement. After the above registration has been done with, registration with other authorities if applicable may be performed (eg.; GST Registration etc.)

    POST-REGISTRATION COMPLIANCES OF PARTNERSHIP FIRM:

    • Maintenance of Partnership records: after registration, it becomes crucial that the firm maintain the records of partnership including the accounts of the firm and transactional history with third parties. It is also important that tax regulations be adhered to and tax returns be filed in a timely manner. 
    • Renewals and updates: with the changing needs of the business, the deed may be amended timely and accounts are updated in a prudent manner. It is advantageous for a firm in a dynamic business environment to adapt a flexible management style and have transparent financial records. 

    CONCLUSION

    In cessation, the registration of a partnership firm is a step that all partnership firms must take in order to protect their business and themselves from legal disputes, and to further establish a certain level of credibility in the market and amongst stakeholders. Not only is the process of registration easy, but also efficient now with most facilities available online. Lastly, registering a firm is only but a small step in preventing larger financial and legal disputes that are common to arise in the normal course of business.

    Wish to obtain Partnership Registration? Click the link now: https://tmwala.com/partnership-firms-in-india/

    Link to government portal for partnership registration: https://services.india.gov.in/service/detail/registration-of-partnership-firm

    Leave a Reply

    Your email address will not be published. Required fields are marked *

    Choose your Entity Type

    Individual/ MSME/ Sole Proprietorships

    Non-MSME/ Large Entities

    File a Trademark, Trademark application logo of TMWala

    Original price was: ₹15,000.00.Current price is: ₹6,999.00.

    Trademark Application @ ₹6999* (Premium Discounted Plan for MSME/Individual/Sole Proprietorships) Comprehensive

    Government Fees

    ₹4500/-

    Add to cart
    File a Trademark, Trademark application logo of TMWala

    Original price was: ₹15,000.00.Current price is: ₹6,999.00.

    Trademark Application @ ₹6999* (Premium Discounted Plan for Non-MSMEs/Large Entities) Comprehensive

    Government Fees

    ₹9000/-

    Add to cart

    Choose your Entity Type

    Individual/ MSME/ Sole Proprietorships

    Non-MSME/ Large Entities

    Trademark Application by TMWala

    Original price was: ₹3,500.00.Current price is: ₹1,999.00.

    Trademark Application @ ₹1999* (Standard Discounted Plan for MSME/Individual/Sole Proprietorships) Affordable and Effective

    Government Fees

    ₹4500/-

    Add to cart
    File a Trademark, Trademark application logo of TMWala

    Original price was: ₹3,500.00.Current price is: ₹1,999.00.

    Trademark Application @ ₹1999* (Standard Discounted Plan for Non-MSMEs/Large Entities) Economical, Quick & Easy

    Government Fees

    ₹9000/-

    Add to cart

    Choose your Entity Type

    Individual/ MSME/ Sole Proprietorships

    Non-MSME/ Large Entities

    Trademark Application by TMWala

    Original price was: ₹1,500.00.Current price is: ₹999.00.

    Trademark Application @ ₹999* (Basic Discounted Plan for MSME/Individual/Sole Proprietorships) Best-Selling, Economical & Easy

    Government Fees

    ₹4500/-

    Add to cart
    Trademark Application by TMWala

    Original price was: ₹1,500.00.Current price is: ₹999.00.

    Trademark Application @ ₹999* (Basic Discounted Plan for Non-MSMEs/Large Entities) Best-Selling, Economical, Quick and Easy

    Government Fees

    ₹9000/-

    Add to cart