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Partnership Firm Registration
Overview
This is the one of the most popular and preferred form of entity, for small business owners and closely held groups who wish to perform their functions privately, with lesser number of compliances. Setting up a Partnership firm is very pocket friendly for budding entrepreneurs and small business owners and for individuals who want to come together for common business goals.
A partnership firm is a business structure in which two or more individuals manage and operate a business in accordance with the terms and objectives set out in a Partnership Deed that may or may not be registered. It is governed by Section 4 of the Partnership Act, 1932.
A partnership firm is best for small and medium businesses. Low costs, ease of setting up and minimal compliance requirements make it a sensible option for such businesses. Registration is optional for General Partnerships. It is the best option for the newly started business. There can be registered as well as unregistered partnership firms.
For larger businesses, it has lost its relevance with the introduction of the Limited Liability Partnership (LLP). This is because an LLP retains the low costs of a partnership while providing the benefit of wide recognitions, unlimited liability, which means that partners are not personally liable for the debts of the business and is also governed by the ministry of corporate affairs “MCA”.
Benefits of Partnership Firm Registration in India
Easy to start
A partnership firm is easy to start. The only document to start the partnership firm is a ‘Partnership Deed’.
Minimum compliance
As compared with LLP and Private Company, partnership firms are not required to file annual returns and forms with registrar. Even change of partner and amendment to partnership deed require minimal steps.
Privacy
The Firm is not required to file any documents with MCA. The Financial statements of partnership firms are not available general public view.
Non audit
The financials of firm are not compulsorily required to be audited unless it reaches Tax Audit limit under Income Tax Act. Whereas all Private Limited Companies are compulsorily required to be audited and in case of LLP the turnover threshold is just 40 lacs.
Characteristics of Partnership Firm Registration Online
Number of Partners: A partnership must have at least two partners. When performing banking transactions, the maximum is 10; in all other situations, the maximum is 20.
Voluntary Registration: Although it is not required to register a partnership, it is always advisable to do so because doing so has many additional advantages.
Contractual partner: There is a contractual tie between each partner. A original partnership deed format proposes that in order on various aspects governs the relationship. Each and every partner signs the deed, binding each and each of them.
Competency of the Partners: According to the Act, the partners entering into the agreement must be competent adults and cannot be minors.
Profit and Loss Sharing: The partners divide the profits or losses according to the percentages that were agreed upon and recorded in the agreement.
Unlimited Liability: In all partnership firms governed by the aforementioned Act, each partner is jointly and severally liable for any losses incurred by the firm.
Interest Transfer: A partner’s interest may not be transferred without the other partners’ approval.
Principal-agent relationship: Partners and the firm have a principal-agent relationship. The agent acts on behalf of the company, so it is expected that he will act in the company’s best interests. Any one of the partners may act on behalf of the other partners, or the entire partnership may carry out the business jointly.
Documents Required & Registration procedure
The list of documents required and registration procedure of Partnership Firm registration, varies from state to state. Registration of Partnership comes under ambit of State/UT, thus every state/UT has separate procedure and documents requirement. In most of the states the process is online, however, in some states the process is still offline i.e. physical submission of documents. The fee also varies state to state.
Startup Sampark Procedure for Partnership Firm Registration
Partnership Firm registration is very detailed procedure, which requires keen knowledge, procedure and team of professionals. Each type of Partnership Firm has its tailored requirements be it government or promoter’s. We at STARTUP SAMPARK have a full-fledged, dedicated team of professionals. You are required to fill the form and our expert will reach out to you, to know the exact requirement and gather information. Then our experts at STARTUP SAMPARK will be at your disposal for assisting you with guidance concerning Partnership Firm Registration and its compliance for the smooth functioning of your financial business in India. Our professionals will assist you in planning seamlessly at the least cost, confirming the successful conclusion of the process. We shall guide you with Do’s and Don’t’s as well. We will begin working on your request once all the information is provided, and the payment is received.
Why STARTUP SAMPARK?
STARTUP SAMPARK is one of the platforms which coordinates to fulfil all your Secretarial, Legal, Licensing and Taxation requirements and connect you to consistent professionals. Our team consist of Chartered Accountants, Company Secretaries, Cost Accountants, Advocates.
We are a management consultancy and technology platform to simplify legal and business related matters. We are committed to help start-ups, small business owners and non-compliant businesses in solving their legal, secretarial and taxation compliance related to setting up and running the business smoothly and compliantly.
Our clients can also track the assignment progress at all times through a dedicated portal provided to you along with User Id and Password. You can comment and find the resolution and ask questions on the dedicated portal provided to you. If you have any questions about the Partnership Firm registration process, our experienced representatives are just a call away.
Step 1: Fill the query form.
Step 2: Our Expert will connect with you
Step 3: Make payment through hassle free payment portal
Step 4: Get confirmation on mail and receive User Login and password
Step 5: Submission of documents with us on our client portal
Step 6: Executive will process your application
Step 7: Track progress of your order all the time on our client portal
Step 8: Greetings, Order completed.
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FAQs
A partnership firm is a business structure in which two or more individuals manage and operate a business in accordance with the terms and objectives set out in a Partnership Deed that may or may not be registered. It is governed by Section 4 of the Partnership Act, 1932.
A partnership firm is best for small businesses that plan to remain small. Low costs, ease of setting up and minimal compliance requirements make it a sensible option for such businesses. Registration is optional for General Partnerships. It is the best option for the newly started business.
Yes, you can do so, by filing of prescribed forms under MCA with respective Registrar of Companies. In such cases NOC has to be obtained from Registrar of Firms.
No, partnership registration is not necessary. However, it is advisable for you to have a partnership firm registration. Also, remember that for a partner to sue another partner or the firm itself, the partnership should be registered. Moreover, for the partnership to bring any suit to court, the firm should be registered. For this reason, it is recommended that larger businesses register the partnership deed.
A partnership requires in minimum 2 persons, and maximum, in case of general business, 20 people, and in case of banking business, 10 people. In case, you want to include more partners in your firm, you should choose to form an LLP.
The registration fees vary from state to state and also depend on the capital of the partnership.
In most of the states and UTs the process is online. However, there are still some states/UTs in which the process is offline, documents have to submit physically.
The deed should contain names of the partners and their addresses, the partnership name, the date of commencement of operation of the firm, any capital invested by each partner, the type of partnership and profit-sharing matrix, rules and regulations to be followed for intake of partners or removal. Any other conditions or lawful business objects the partners want to include.
The partners in a partnership firm are the owners, and thus, are not a separate entity from the firm. Any legal issues or debt incurred by the firm is the responsibility of its owners, the partners.
A Partnership firm is liable to pay tax at the rate of 30%, plus 12% surcharge (where total income exceeds Rs. 1 crore) and 4% cess.