Partnership Firm Registration

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    Online Partnership Firm Registration In India

    Partnership firm represents a business entity that is formed with a purpose of making a profit from the business. Two or more parties come together with a formal agreement (known as Partnership Deed) to own and manage the business. The risk and responsibilities are shared amongst the partners that shred the burden of an individual partner. Also, when two comes together, more capital and expertise are combined that helps to reach the business goal(s) easily.

    Partnership Act, 1932 defines the structure of a Partnership firm by providing all the necessary provisions to run the same. The Act validates both registered and unregistered partnership firms in India. However, an unregistered partnership has few shortcomings that attract partners towards Partnership Firm Registration. But, one can overcome it by registration firm anytime after it is formed.

    Characteristics of Partnership Firm

    • Number of Partners A partnership must have at least two partners. When performing banking transactions, the maximum is 10; in all other situations, the maximum is 20.
    • Voluntary Registration: Although it is not required to register a partnership, it is always advisable to do so because doing so has many additional advantages.
    • Contractual partner: There is a contractual tie between each partner. A original partnership deed registration format proposes that in order on various aspects governs the relationship. Each and every partner signs the deed, binding each and each of them.
    • Competency of the Partners: According to the Act, the partners entering into the agreement must be competent adults and cannot be minors.
    • Profit and Loss Sharing: The partners divide the profits or losses according to the percentages that were agreed upon and recorded in the agreement.
    • Unlimited Liability: In all registration of partnership firm governed by the aforementioned Act, each partner is jointly and severally liable for any losses incurred by the firm.
    • Interest Transfer: A partner’s interest may not be transferred without the other partners’ approval.
    • Principal-agent relationship: Partners and the firm have a principal-agent relationship. The agent acts on behalf of the company, so it is expected that he will act in the company’s best interests. Any one of the partners may act on behalf of the other partners, or the entire partnership may carry out the business jointly.

    Documents Required for Partnership Firm Registration

    ID Proof

    Scanned copy of PAN Card of all directors and Aadhar card/ Voter ID/ Passport/ Driving License

    Address Proof

    Latest Bank statement/ Utility bill in the name of director should not be older than two months

    Photo

    Latest passport size photograph of all the Partners

    Rent Agreement

    (NOC), Utility bill,  Rent agreement (if rented)/ Registry Proof or House Tax Receipt (if owned)

    Benefits of Partnership Firm

    Shared Responsibilities

    The word Partnership itself describes individuals coming together for some common business object. The partners share the responsibility to work and manage the business together. Responsibilities for a particular field or task can be assigned to one or more partners by indicating the same in a Partnership Deed.

    Operating Flexibility

    A Partnership firm is operated on the basis of the Partnership deed executed by the partners, mutually. The partners can decide how to operate the business with their mutual consent. Also, the Partnership Deed can be changed according to the requirement even after partnership deed registration is completed. There are no limitations or restrictions on the partners in regards to running the business, as long as it is covered under the signed agreement.

    Pre-defined Object or Period

    At the time of registering a Partnership firm, the deed enumerates the pre-defined business objectives and activities, which is the main aim to commence business. A partnership can be formed within a specified period or to complete a specific project or object. Once the same is completed, the partnership will automatically stand dissolved.

    Various Financial Returns to the Partners

    Partners involved with the firm get various types of returns for their capital as well as their individual efforts. The working partner also receives remuneration in addition to the interest on capital and share of profit, as may be agreed by the partners. Also, the share of profit from partnership firm is exempt for the partner receiving it.