Partnership Firm Registration

Overview of the Partnership Firm Registration procedure in India:

A Partnership Firm Registration is not mandatory but recommended per the Partnership Act, 1932. Individuals come along as partners and form a partnership that starts by investing some shared capital. It is not that difficult to create a Partnership Firm with the services of Eazy Startups. A partnership Firm is also a prevalent choice of business type among entrepreneurs and startup aspirants. The primary purpose of such a firm is to provide the partner’s profit.

Advantages of registering a Partnership Firm:

Here are some benefits of registering and operating a Partnership Firm in India:-

• Easy to make decisions: A partner of the firm has the absolute right to make money-related transactions on behalf of the partnership at any point in time without asking for permission or consent from any of the other partners. This makes it easy to make decisions and also take risks.
• Easy Management: It is easy to manage a Partnership Firm as a Partnership Deed guides the partners. The partners are assigned individual roles and responsibilities according to their capabilities and expertise in particular fields. All of this is mentioned in the Partnership Deed, making it a tool to resolve and generally altogether avoid disputes.
• Simple Business Structure: In other firms, the registration procedure is far more complex than in a Partnership Firm. Partnership Firm registration requires minimal documentation and just the partnership deed. In contrast, other company types require many forms and documents like DoA, MoA, and AoA that take days to prepare. This makes Partnership Firm a more straightforward business structure and also popular among startups.
• Higher chances of raising funds: Banks prefer to sanction loans and credit to Partnership Firms than any other business forms. This is because there are multiple partners, which makes this investment more feasible. This also makes it easier for Partnership Firms to raise funds from the market and run their business.

What are the documents required when registering your Partnership firm?

Multiple documents are demanded by the concerned authorities when registering for your Partnership Firms:

• Partnership Deed: There is a high chance of disputes among the partners in Partnership Firms. To avoid the possibility of conflicts, a Partnership Deed containing the rules, duties, regulations, methodology, functions and shares of the business is prepared. This document is prepared on a Judicial Stamp Paper in India and is signed by all the partners adhering to the deed. This reduces the risk of any discomfort and conflicts between the partners.
• Address Proof: It is mandatory to submit a copy of the address proofs of an individual partner’s residence. This proof can be an aadhar card/ ration card/ voter card/ driving license. Regarding the office address, a utility bill such as electricity, water, gas, etc. can be submitted. If it is a rented place, then a NOC and a rental agreement from the landlord must be attached along with the other documents.
• Pan Card: This is taken as identity proof of the members of the partnership firm.

Step by Step guide to the Partnership Firm Registration Process:

There are various steps involved in the registration process of a Partnership Firm:-

• Apply for a unique name for the partnership firm
• Submit Form 1 Application to the Registrar of Firm. If the form is duly filled, attach the fee amount to it.
• A partnership deed is prepared on a Judicial Stamp Paper, then filled and signed by all the partners. Thereby consenting to the conditions mentioned in the deed. Below is the information that the deed will have:-

1. Partner’s Name, Qualification, Address etc
2. Business niche and its activities
3. The amount of capital invested by every partner into the business
4. Shares of all the partners
5. Loan details given by the partners to the firm
6. The profit and loss ratio shared among the partners
7. Rules, regulations, rights, duties, commissions, salaries, or payable amount of the partners of the firm
8. In case of a partner’s death, the process must be followed.

• Once everything is duly filled, attached and submitted to the authorities, it is verified, and the firm registration is complete.

Frequently Asked Questions