Partnership Firm

A Partnership Firm is a kind of business structure in which 2 or more persons start and manage a business firm. The functions, terms and objectives of the partnership are laid down in a Partnership Deed. The partnership deed is created on a judicial stamp paper and attested by all the partners. The partners have unlimited liability and are personally liable for the debts of the partnership firm. The profits of the business are divided between the partners in accordance with their share in the firm. There can be a minimum of 2 and maximum of 20 partners in a partnership firm.

Partnership registration is opted commonly by small and medium-sized businesses with low capital investment. This type of business structure involves less legal complications, low costs and very few legal compliances. Partnership registration is optional, however, It is advisable to opt for partnership registration as it provides legal recognition and safety to the business.

Register Your Partnership Firm Hassle-free

What documents are required for Partnership registration in India?

To register a general partnership, the required documents include the following:

  1. Application for Partnership registration
  2. Original copy of Partnership Deed signed by partners
  3. Affidavit stating the intention of partners to work together
  4. Proof of address, including rental or lease agreement or electricity bill
  5. Proof of Identification, including Aadhar Card, Voter ID card, PAN etc.

What is the process of Partnership registration?

The first step in partnership registration in India is filing an application for registration with the appropriate government authority. The next step involves drafting and registering the partnership deed. After partnership deed registration, the PAN & TAN for the partnership firm is obtained from the relevant authorities. The entire process of partnership registration can take up to 8-15 days, subject to processing of applications by the government.

FAQs

How many partners can form a Partnership Firm?
There must be at least 2 partners to opt for partnership registration. A firm involved in banking business can have up to 10 partners and a firm involved in any other kind of business can have a maximum of 20 partners.
Who can be a partner in a Partnership firm?
Any individual or organisation can become the partner in partnership firm. However, all partners must have attained the age of 18 years at the time of partnership registration.
Can NRIs or Foreigners become partners in a Partnership firm?
No, an NRI or foreign national cannot become a partner in a partnership firm in India.
Are partners personally liable for the debts of the partnership firm?
Yes, partners of a general partnership are personally liable to pay the debts of the partnership firm. The personal assets of the partners can be used to pay the debts of the firm in case the business suffers from losses.
What is a Partnership Deed?
The partnership deed is the document that lays down the information about the partners, the details about each partner’s share in the business, terms of partnership, objectives of the business, etc.
Is it compulsory to register a Partnership firm in India?
No, it not mandatory to register a partnership firm in India. However, to give a legal recognition to the business, it is important to go for partnership registration. A registered partnership firm can sue someone in the court and can have property in its own name.
What are the differences between a Partnership and a Limited Liability Partnership (LLP)?
The primary difference between a general partnership and an LLP is that the partners of a partnership firm can be held personally liable for debts of the business. However, the liability of the partners in an LLP is limited to the extend of their share and they cannot be held liable personally.
Is Audit required for a Partnership firm?
No, an audit is not required in case of a partnership firm in India.
Is it required to conduct a board meeting in a Partnership firm?
No, a partnership firm is not required to conduct a Board meeting.
Do I need an office space to start a Partnership?
No, you do not need to have a separate office space for partnership registration. A firm can be started even at your home address, with valid address proofs.