Partnership Firm Registration

Partnership Firm Registration

Partnership, as the name suggests, is defined as a relation between two or more persons coming together for a common objective. Similarly, when the objective is to run a company and earn profit it’s termed as the Partnership firm. It is one of the most popular forms of the business constitution for businesses that are managed, owned and controlled by an Association of People for profit. It is comparatively easier to start and prevalent amongst startups, SMEs and often businesses in the unorganized sectors. With the introduction of LLP or Limited Liability Partnerships in India, Partnership Firms are on the downhill as LLP has a competitive edge over the traditional Partnership Firms structure.

Following are the characteristics of Partnership Firm:

1. Minimum of 2 and maximum limit is 20 in all businesses except banking business where the maximum number is 10.
2. Formation of Partnership Deep which is basically a written agreement and signed by all the partners binds them in a contractual relationship.
3. Though registration of partnership firm is not mandatory.
4. Profit sharing is decided among the partners in any ratio as mutually agreed. If it is not explicitly mentioned then equal sharing is set by default.
5. As Liability of partners of a partnership firm is not limited or defined hence all the partners are jointly held liable for the debts and losses of the firm.
6. A partnership firm has no distinct legal status separate from its partners.
7. In Partnership firm, the relationship is based on mutual trust and faith among the partners in the interest of the firm. The business of the firm may be carried on by either by all of the partners or any one of them acting for all. According to this, every partner is an agent when he is working on behalf of other partners and he is the principal when other partners act on his behalf.
8. These firms are governed by the Indian Partnership Act, 1932. Registration of partnership firm is optional and at the discretion of the partners. Registration of partnership firm may be done before starting a business or anytime during the continuation of partnership.
9. It is always advisable to register the firm since registered firms enjoy special rights which aren’t available to the unregistered firms. In order to register the firm An application form along with fees is to be submitted to Registrar of Firms of the State in which firm is situated. The application has to be signed by all partners or their agents.

Document Required

Documents Required for Partnership Firm Registration:

1. Identity and Address Proof of Partners.
2. Registered Office Proof.
3. Signed Partnership Deed