A Partnership firm registration is one of the most popular forms of business organization, where two or more people come together to form a business as per the terms and objectives mentioned in the partnership deed. and divide the profits thereof in an agreed ratio. All the partners of the partnership firm are required to sign the partnership deed in order to start its business. Partners running the business are solely responsible for the profits and losses of the firm. Therefore the partners have unlimited liability. It is not mandatory to register the partnership firm but there are additional advantages if it gets registered.
Indian Partnership Act 1932 is the governing law that regulates the partnership firms in India. The maximum number of partners in the partnership firm can be 10 for banking business and 20 for other forms of business. A partnership firm is a separate legal entity from its partners. It can not be a debtor or creditor and also can not own any property. A partnership firm would be dissolved if the number of partners reduces below 2 in case of death, incapacitation, or resignation of a partner.
A registered Partnership firm has some advantages over the unregistered partnership firm. It can easily convert into other business structures such as Private Limited Company or LLP
There is a minimum compliance requirement in the case of Partnership firms and therefore many individualism considers it as better options. There is no requirement of appointing an Auditor, Filing annual accounts with the registrar. These are few as compare to LLP registration, in addition to this there is no need to file taxes depending on turnover, services, and sales tax in the Partnership firm.
The registration of Partnership Firm enables the partners with the power to claim set-off. When any third party files a suit against the Partnership Firm, the Partnership firm can claim the set-off, if any against the claim of the third party. This power is not available to an unregistered firm.
The Partnership Firm is very economical to start as compared to LLP registration. it is economical due to its minimum compliance requirements. It is inexpensive in the long run also. This form is business is mainly opted by home businesses.
The very first step is to draft a Partnership Deed as per the provision prescribed under the Partnership Act 1932. Any clauses required for the business of the proposed Partnership firm can be incorporated in the Partnership deed.
Once the draft of the Partnership deed is prepared in consultation with the professionals is done, then it shall be duly executed by payment of stamp duty as applicable for the concerned state and notarization of the same. The Partnership Deed shall be duly signed by all the partners of the firm at the place specified along with the initial on all rest pages. Also, the witnesses of the partners shall also provide the signature along with the residential address.
The execution of the Partnership Deed shall be done after the payment of stamp duty as prescribed under the State Stamp Act where the business places of the Partnership firm is situated.aftyer payment of stamp duty, the deed shall be notarized after providing a signature of Partners and Witnesses.
The application for the allotment of PAN can be made before or after the registration of the Partnership Firm. the application of the PAN allotment shall be supported by a copy of the Partnership deed.
The concerned authority to register the Partnership firm of the Registrar of Firms within whose jurisdiction the place of business falls. The application for registration of Partnership Firm shall contain the name of the firm, name of the partners and their addresses, place of business, etc. which is followed by opening a Bank Account.
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Any individual who is eligible to enter into a contract can become a partner in the partnership firm. The minimum age required to enter into a contract is 18 years therefore he must have completed this age limit. Contact us Now.
No, it is not compulsory to register a Partnership firm but it is recommended to register an unregistered firm that will not be able to recover its cost in case of any dispute.
Yes, it can be sued in the name of the firm as it is a separate legal entity.
No, there is no such compulsion for the partnership deed to be in written form.