Partnership Firm Registration
Form a partnership under the Indian Partnership Act.
Overview
A Partnership Firm is one of the simplest and most popular business structures in India where two or more individuals come together to carry on a business with the intention of sharing profits. Partnership firms in India are governed by the Indian Partnership Act, 1932 and are formed through a written Partnership Deed that records the rights, duties, profit-sharing ratio and obligations of every partner. Partnership firms are easy to set up, flexible to manage and well-suited for small and medium businesses, family ventures and professional service firms.
Understanding Partnership Firms
A partnership firm is a business structure where two or more individuals come together with the intention of carrying on a business for profit. Partners share responsibilities, risks and rewards according to the partnership deed. Partnerships are relatively easy to form and operate, and can be tailored as general partnerships, where all partners actively manage the business, or as limited partnerships where some partners contribute capital but stay out of day-to-day operations.
Types of partnerships
General Partnership (GP)
Two or more individuals share the management, profits and losses of the business equally or as agreed in the deed. All partners have unlimited liability.
Limited Partnership (LP)
General partners actively manage the business with unlimited liability, while limited partners only contribute capital and have liability restricted to their investment.
Limited Liability Partnership (LLP)
Combines features of partnerships and companies. Partners enjoy limited liability and the firm is a separate legal entity registered with the MCA.
Joint Venture
A short-term collaboration between two or more parties to achieve a specific business objective without forming a permanent partnership.
Registered vs unregistered partnership firm
Registration of a partnership firm is optional in India, but a registered firm enjoys important legal rights. An unregistered firm cannot sue a third party or a partner to enforce a right arising from a contract. For this reason, we strongly recommend formal registration with the Registrar of Firms of your state.
Key clauses every Partnership Deed must contain
- Name and address of the firm and all partners
- Nature of business
- Date of commencement of partnership
- Capital contribution and profit-sharing ratio
- Roles, rights, duties and powers of each partner
- Interest on capital, drawings and loans by partners
- Salary or commission payable to partners
- Procedure for admission, retirement and expulsion of partners
- Dispute resolution mechanism
- Procedure for dissolution of the firm
Why choose us
- Easy and inexpensive to form
- Minimal regulatory compliance compared to companies
- Flexible internal management through the partnership deed
- Shared capital, skills and responsibilities
- Direct flow of profits to the partners
- Quick decision-making with mutual consent
Documents required
- PAN card of all partners
- Aadhaar card or any government ID of all partners
- Passport-size photographs of all partners
- Address proof of all partners (bank statement, electricity or mobile bill)
- Proof of the principal place of business (rent agreement plus NOC, or ownership proof)
- Latest utility bill of the business premises
- Partnership Deed on stamp paper, signed by all partners
- Form-1 application for registration with the Registrar of Firms (if opting for registration)
Our process
- 1
Free consultation
Talk to our expert to choose between a registered and unregistered firm and discuss the deed.
- 2
Drafting the Partnership Deed
We draft a comprehensive deed covering capital, profit ratio, roles, duties and dispute resolution.
- 3
Stamping and execution
The deed is printed on the correct value of stamp paper and signed by all partners with witnesses.
- 4
PAN allotment for the firm
We apply for the firm's PAN card with the Income Tax Department.
- 5
Registration with the Registrar of Firms
Form-1 and the deed are submitted to the Registrar of Firms of the relevant state.
- 6
Registration certificate
Once approved, the Registrar issues the Certificate of Registration.
- 7
Bank account and GST registration
We help open a current account and apply for GST if required.
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