Partnership Firm Registration

Partnership Firm Registration

A partnership Firms in india governed by the Indian Partnership Act of 1932 stands as one of the fundamental structures for conducting business. when two or more individuals collaborate to establish a business venture, sharing profit/Loss according to an agreed-upon ratio in the partnership deed.

There are two types of partnership firms, registered and unregistered partnership firm. It is not mandatory to register a partnership firm; however, it is recommended that a partnership firm is registered in order to avail several benefits conferred by the law.

Benefits of a Partnership Firm

• Easy to form, Registration is not mandatory under Registrar of Firms
• Easy to start with less budget
• Capacity to raise funds in the name of firm
• Easy to add and remove partners without any hassle
• Property can be owned in the name of the firm
• Unlimited liability helps in more credit worthiness
• No legal formalities for dissolution

Drawback of a partnership firm

• Unlimited liability increases the risk of business
• No perpetual succession i.e. sudden death or retirement of any one of the partners dissolves the partnership
• Lack of good faith and confidence among partners causes great limitations
• Raising substantial capital may be challenging as it relies on the partners' contributions and potential loans
• Rate of Income tax higher than company

Procedure for Partnership Firm Registration

• Draft the Partnership Deed
• Application for Registration under registrar of firms and obtain the certificate of registration (optional)
• Apply for PAN and TAN

Documents Required for Partnership Firm Registration

• PAN Card of each partner
• Address proof of all partners
• Copy of Photo of all the partners
• Name and nature of business
• Address of business premises
• Profit & loss sharing of partners