Partnership Firms Registration Procedure Under Indian Partnership Act

What is Partnership Registration?

A Partnership is one of the most important forms of a business organization. A partnership firm is where two or more persons come together to form a business and divide the profits in an agreed ratio. The partnership business includes any kind of trade, occupation and profession. A partnership firm is easy to form with fewer compliances as compared to companies.

The Indian Partnership Act, 1932 governs and regulates partnership firms in India. The persons who come together to form the partnership firm are knowns as partners. The partnership firm is constituted under a contract between the partners. The contract between the partners is known as a partnership deed which regulates the relationship among the partners and also between the partners and the partnership firm.

Advantages of Partnership Firm

Easy to Incorporate

The incorporation of a partnership firm is easy as compared to the other forms of business organisations. The partnership firm can be incorporated by drafting the partnership deed and entering into the partnership agreement. Apart from the partnership deed, no other documents are required. It need not even be registered with the Registrar of Firms. A partnership firm can be incorporated and registered at a later date as registration is voluntary and not mandatory.

Less Compliances

The partnership firm has to adhere to very few compliances as compared to a company or LLP. The partners do not need a Digital Signature Certificate (DSC), Director Identification Number (DIN), which is required for the company directors or designated partners of an LLP. The partners can introduce any changes in the business easily. They do have legal restrictions on their activities. It is cost-effective, and the registration process is cheaper compared to a company or LLP. The dissolution of the partnership firm is easy and does not involve many legal formalities.

Quick Decision

The decision-making process in a partnership firm is quick as there is no difference between ownership and management. All the decisions are taken by the partners together, and they can be implemented immediately. The partners have wide powers and activities which they can perform on behalf of the firm. They can even undertake certain transactions on behalf of the partnership firm without the consent of other partners.

Sharing of Profits and Losses

The partners share the profits and losses of the firm equally. They even have the liberty of deciding the profit and loss ratio in the partnership firm. Since the firm’s profits and turnover are dependent on their work, they have a sense of ownership and accountability. Any loss of the firm will be borne by them equally or according to the partnership deed ratio, thus reducing the burden of loss on one person or partner. They are liable jointly and severally for the activities of the firm.

Documents Required For Partnership Registration

The following documents are required for the registration of a Partnership firm:
Statement in Form 1 with the prescribed fees
Notarised True copy of the Partnership Deed stating the following :
  • The firm-name
  • The nature of business of the firm
  • The place or principal place of business of the firm
  • The names of any other places where the firm carries on business
  • The date when each partner joined the firm
  • The names in full and permanent addresses of the partners
  • The duration of the firm
    • Proof of ownership or rent/lease of the location of your business.(e.g. Electricity Bill/ Water Bill or Rent/Lease/Leave and Licence Agreement of Business Place)
    Copy of PAN Card of partners
    Copy of Aadhaar Card/ Voter identity card
    The Statement must be signed by all the partners of the firm and must also be verified by affidavit in the prescribed manner.

    Procedure For Partnership Registration

    Complete our Partnership Form

    You are required to fill the details in our simple online questionnaire and submit documents.

    Verification of Documents

    For further procedures, details provided by you will be verified by our experts.

    Partnership Deed Drafting

    Further after submitting your documents we shall draft your Partnership deed.

    Apply for TAN & PAN

    We will create all the required documents and file them with ROC on your behalf.

    Completed

    Your work is completed

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    FAQ

    At least two partners are required for LLP registration. The maximum partners can be 200. If you are the sole owner, you can register as a One Person Company.

    Any individual/organisation can become the partner in LLP including foreigners/NRI’s. However, the individual must 18+ above in terms of age and should have a valid PAN card.

    Our procedure is 100% online which means there is no compulsion for you to be present at our office physically. A scanned copy of documents can be sent to us via mail, and we will handle the rest. You will get the company incorporation certificate from MCA via courier at your business address.

    We do not have any hidden charges. Our system is quite transparent. After making your payment, we will send you an invoice that is all-inclusive, with no hidden charges. Our team provides you support till you get your LLP bank account.

    You need to have a bank account with a minimum balance, which could be as little as Rs. 5000. You need not invest any more capital in starting the business. You needn’t even deposit this amount to the bank. You can also show that the capital has been utilised as the pre-incorporation expenses of LLP e.g, LLP registration expenses. You can also show this capital has been infused in form of assets such as computers etc.

    Yes, but only after he has been assigned with DIN/DPIN. However, at least one designated partner in LLP must be a Resident of India. In fact, the foreign director can also be a majority shareholder in the company

    Yes, you can register your LLP at your residential address. It is perfectly legal to start the company at your home or in your garage. MCA team typically doesn’t visit your office. You just have to provide your home address proof such as rent agreement or electricity bill.

    Yes, you as a salaried person can become a partner in an LLP. You need to check your employment agreement if that allows for such provisions. In most, cases employers are comfortable with the fact that their employee is a director in another company.

    No, you can’t convert your LLP into a Private Limited Company as it is not MCA. Both the LLP Act, 2008 and the Companies Act, 2013 don’t have any provisions on conversion of LLP in a private limited company. However, if you want to expand your business you can register a new Private Limited Company with the same name as that of the LLP. The LLP company just needs to issue a no objection certificate.

    Pksoftech provides LLP incorporation services across India in all cities. We have done LLP registration in Mumbai, Delhi, Gurgaon, Noida, Bangalore, Chennai, Hyderabad, Ahmedabad, Kolkata, Surat, Pune, Jaipur, Lucknow, Kanpur, Nagpur and other Indian cities.