Partnership Firm Registration
Partnership deed drafting along with GST registration.
Market Price: | ₹8500 |
|---|---|
| Professional Services Price: | ₹6092 incl. GST |
| Government Fee: | Included |
How to register a Partnership firm in India?
Partnership firm registration is required when two or more parties sign a formal agreement to manage and operate a business and share both the profits and losses.
Registering a Partnership is the right choice for small enterprises as the formation is straightforward and there are minimal regulatory compliances.
The Partnership Act has been in existence in India since 1932, making partnerships one of the oldest types of business entities in India. A partnership firm can even be registered after it is formed. There are as such no penalties for non Registration of a Partnership firm. But unregistered Partnership firms are denied certain rights under section 69 of the Partnership Act that majorly deals with the effects of non Registration of Partnership firms.
What documents are required to register a Partnership Firm In India?
The application for the Partnership registration form must include the prescribed documents like the Identity proof, address proof, a real copy of the Partnership deed entered into and the proof of the Principal place of business.
Any of the following documents can be submitted as identity proof and address proofs.
- PAN card
- Passport
- Driver License
- Aadhar Card
- Voters ID
Proof of Business premise can be established by submitting the following documents:
- Sale Deed in case if the Partner owns the place
- Rental agreement copy if the office is on rental basis
- Copy of the latest electricity bill or the tax bill receipt
How to register Partnership Firms in India?
Professional Services can help you register a partnership firm in less than seven days.
Types of Partnership firm
- Depending on the extent of the liability while Partnership firm registration, we can derive the different classes of partners.
- Partnership Firms can be classified into two types registered and unregistered Partnership firms. The Indian Partnership Act states that the only criterion to commence the business as a Partnership firm is a finalization and the partnership deed’s execution between the Partners.
- Under this act, the Partnership firms don’t need to be registered. As an outcome of this lot of partnership businesses exist as unregistered partnership firms.
- There are no penalties for the nonregistration of the partnership firms. Also, a partnership firm can be registered even after formation. But the unregistered partnership firms have been denied certain rights in Section 69 of the Partnership Act, which deals majorly with the effects of the non-registration of the partnership firm.
- Here are the reasons why an individual should opt for a registered partnership firm:
- A registered firm partner cannot file suit in any court against the firm or other partners for the enforcement of any right arising from a contract or right conferred by the Partnership Act.
- No suit to enforce a right arising from an agreement can be instituted in any court by or on behalf of a firm against any third party unless the firm is registered under the Partnership Act.
- An unregistered firm or any of its partners cannot claim set-off or other proceedings in a dispute with a third party.
- Therefore, it is better to register a Partnership sooner or later.
What is the difference between Partnership and LLP?
| Basis | Partnership | LLP |
|---|---|---|
| Cost | A partnership firm is registered through Professional Services starting from Rs.4092 | LLP can be registered online starting at just Rs.7899 through Professional Services |
| Authority | A partnership firm is registered under Section 58 of the Indian Partnership Act. | LLPs in India are registered under the Ministry of Corporate Affairs, Central Government. |
| Limited Liability Protection | In a Partnership, the partners jointly venture to share the profits and losses. | In an LLP, the Partner is not responsible for any negligence or misconduct of another partner. LLPs also provides liability protection to the owners from the debts of the LLPs. |
| Number of Partners | Partnerships must have two minimum of two partners to be registered. If the number of partners reduces below mandatory two due to death or incapacitation, the firm will stand dissolved. | Similar is the case with the LLPs. At least two members are required to get registered. If the number of Partners reduces below 2, the Partner would still find a new partner without dissolving the LLP. |
Registering Partnership firms do have certain drawbacks as compared to the newly introduced Limited Liability Partnerships. As the Partnership firms do not provide Limited Liability Protection for the Partners.
In the recent past, LLPs have become a prime choice for small and medium-sized business firms.
Let us take a look at the process of converting a Partnership firm into an LLP.
To commence the Partnership conversion into an LLP, Digital Signature Certificate and DPIN OR Director Identification Number (DIN) must first be obtained for all the Partners.
Following documents are required along with Form 17 :
- Consent of Partners for conversion into an LLP
- Incorporation Documents for LLP
- NOC from Tax Authorities
- Financial Statements of the Partnership firm
- List of all creditors along with their consent
- Any other document or information as requested by the authorities.
Once the mentioned documents are submitted to the Registrar after the verification, a certificate of Registration for LLP is issued.
The LLP must then inform the concerned Registrar of firms about converting a Partnership into an LLP within 15 days from the date of conversion through the prescribed forms.