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Partnership Firm

We can help you set up your Partnership Firm business in least time while you focus fully in your core business

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    Overview

    A partnership firm is a well-recognized business structure formed with the mutual consent of all the partners for a profitable purpose. The firm is managed, owned, and controlled by a set of people that are known as partners and have some shared capital in the firm. Partnership firms are distinguished as registered and non-registered firms. Partnership firm registration is not mandatory to register but it is advisable to do so. Partnership firm registration offers various benefits that do not apply to non-registered ones.

    Benefits of Partnership Firm

    Easiest Business Structure

    Partnership can be started by formulating a partnership deed for which partnmership firm registrtaion is necessary.

    Raising Funds

    Multiple partners are capable of making a more feasible contribution; also banks consider a partnership firm more favorable for sanctioning credits and loans.

    Ease In Decision Making

    A partner can perform transactions on behalf of the firm without any consent from other designated partners.

    Easily Scalable

    A minimum of two partners will be required for the formation of a partnership. A maximum number of 50 partners can be added at any time.

    Profit Sharing

    Partner share the profit and loss as per mutually agreed terms and conditions in the agreement.

    Easy Management Without Any Disputes

    All the partners are assigned works and responsibilities as per their capability, as mentioned in the partnership deed.

    Least Compliances

    A partnership does not have to file an annual report to the registrar, unlike a limited liability partnership.

    Process of Partnership Firm Registration

    Documentation

    Prepare and consolidate documents required for LLP registration.

    Issuance of Registration Certificate

    Sub-registrar shall issue registration certificate if all documents were found correct.

    Choose Name

    To get you desired name mutually agreed by all partners.

    Submission of Documents

    Submission of partnership deed to sub-registrar.

    Preparation of Partnership Deed

    As per mutually agreed terms and conditions among partners.

    Documents Needed for Partnership Firm Registration

    Aadhaar Card of Proprietor

    Residence Proof

    Identity Proof

    PAN Card of Proprietor

    Passport Size Photo

    DSC of all partners

    Compare Forms Of Business

    featuresprivate limited companyone person companyllppartnership firmproprietorship firm
    separate legal entity
    limited liability
    number of members
    2-200
    1
    2- unlimited
    2-20
    1
    number of directors / DP
    2-15
    1-15
    2 to unlimited
    not applicable
    Not Applicable
    foreign investment (FDI)
    ownership transfer-ability
    perpetual existence
    tax benefits
    effective
    effective
    low
    low
    good
    statutory compliance
    high
    high
    low
    minimum
    minimum

    FrequentlyAsked Questions

    Most frequent questions and answers

    We have prepared a detailed and easy to understand comparative table showing availability of features and advantages of one form of business to that of others

    To start a partnership firm, the minimum number of partners is two, whereas the maximum number of partners can be 20. The partners must come together to carry on any legal business with the motive of earning profits.

    The partnership business is regulated under Indian Partnership Act, 1932. Which prescribes possibility of two types of the firm, unregistered firm, and registered firm. An unregistered firm is formed by entering into an agreement between two competent persons, known as partners, where the firm is not registered with the registrar of firms. Whereas the firms which subsequently get registered with the registrar of firms by submitting the copy of partnership deed and KYC of partners and the registered office is known as the Registered Partnership Firm.

    Though the Indian Partnership Act, 1932 does not make registration of partnership mandatory, section 69 places certain disadvantages to an unregistered firm. Following are the disadvantages of an unregistered firm.

    • Only a registered partnership firm can claim a setoff
    • An unregistered partnership cannot recover any sum due from third parties if the amount in question is more than Rs. 100/-
    • Only a registered partnership firm can file a legal suit in the court of law for the enforcement of rights against partners.
    • The partners of an unregistered firm cannot file suit against another partner of the firm or the firm itself.

    Hence, we strongly advise registering the partnership firm. An unregistered firm can be registered at any time. Every state government has established the office of the registrar of firms, which is vested with the powers to register the firm and issue the Certificate of Registration of the Firm and a copy of the extracts of the register of firms where the partnership name has been entered.

    Yes. A partnership firm can sue or be sued in its own name. The firm is treated separately from its partners. However, the partners do not enjoy limited liability as available in case of LLP or a company. In a situation where the firm is not in a position to discharge its liabilities, the partners shall be called in to pay the liabilities of the firm.

    Yes. The law presumes that each partner is an agent of the other and while dealing with third parties the partner is representing the partnership firm in good faith. The acts done by one partner is binding on another even if it is not in the knowledge of the other party.

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