Partnership Firm Registration

A partnership firm is a business house which is formed by two or more individual for a particular objective.

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HERE'S HOW IT WORKS

Partnership Firm Registration is quick, simple, and would be possible online with Taxxinn in 3 plain sailing steps

1. Fill Form
Simply fill the above form to get started.
2. Call to discuss
Our expert will connect with you & prepare documents.
3. Get certificate
Get your Company Incorporation certificate

What is partnership firm?


A partnership firm is a business house which is formed by two or more individual who agrees to share there profit and loss of the business. Starting a partnership is a firm is the best choice for small and medium enterprises wherein the individuals decide to contribute to a business and agree upon the share in the profit and losses. The partnership is highly recommendable as it involves less effort in the formation and minimal compliance.

A Partnership firm is a business structure which is in existence from 1932, The partnership Act 1932 is in existence from even before we got the independence of India. But this business structure lost its preference among the young entrepreneurs after the introduction of the Limited liability Partnership Act 2010. The main reason for this was the normal partnership firm has unlimited liability which in the case of LLP the liability is limited and even it is treated as a separate entity.

Partnership firm and the partners are not separate i.e the partnership firm isn't a separate legal entity. So the assets and the liability of the business are owned by the partners. The maximum number of individuals who can form a partnership firm are 10 for banking business and 20 in the case of other businesses. Every partner of the firm can carry out the business on behalf of other partners.

Advantages of Partnership Firm.

Shared Responsibilities:

In a partnership firm, the responsibility is shared between the partners. The word partnership itself denotes that individuals come together to a common agreement to do business. The responsibility of the partners can be mentioned in the partnership deed for each and every partner.

Operating Flexibility:

A Partnership firm is worked based on the Partnership deed drafted by the partners with mutual understanding. The partners can make a decision on how to run the business with their mutual understanding. Additionally, the Partnership Deed can be changed by the partners whenever it is required or necessary even though partnership deep is registered. There are no limitations with respect to maintaining the business, as long as it comes undersigned arrangement.

Pre-defined Object or Period:

At the time of Partnership firm registration itself, the deed contains the pre-defined business goals and activities, which is the primary objective to start the business. A partnership firm can be formed for a particular time period or for a particular project. When the same is finished, the partnership firm is dissolved.

Various Financial Returns to the Partners

Partners engaged with the firm get different sorts of profits for their capital as well as their individual efforts. The working partner additionally gets salary addition to the interest on capital and portion of the benefit, according to the mutual understanding of the partners.

Difference between LLP & Partnership

Cost:

The cost for registration of LLP is slighter higher than the cost for registration of a partnership firm. LLP registration can be done online through Taxxinn at just Rs.5899. A partnership firm can be registered online through Taxxinn at just Rs.5899.

Authority:

A Partnership firm is registered under the register of firms that comes under the state government. Whereas LLP is registered under ministry of corporate affairs, which comes under the central government.

Limited Liability Protection:

The primary advantage of a Limited Liability Partnership over a normal partnership firm is that in an LLP, one partner is not liable for another partner's unfortunate behavior or carelessness. Likewise LLP provides limited liability protection for the partners from the debts of the LLP. However, in contrast to private limited company investors, the partners of an LLP have a right to manage the business directly.

Disadvantages of Partnership Firm


Unlimited Liability:

Each and every partner of the partnership firm is personally liable for the losses in the firm. The personal assets of the partner are taken into the task for repaying the debts. This was the reason to introduce LLP

Number of Members

The maximum number of individuals allowed in a partnership firm is restricted to 20 but in the case of LLP, there is no restriction on numb er of partners.

Lack of a Central Figure

The leadership decides the upliftment of the firm. Combined ownership takes out that feature. In the case of LLP, certain partners are given higher responsibility and power. Those partners are given a position as designated partners

Trust of the General Public

There is no proper structure or regulation for conducting the operation in a partnership firm. It is easy to start and dissolve which leads to distrust among the general public

Documents Required

Identity Proof

Aadhar Card
Driving License
Election Id Card
Passport

Address Proof of Business

Electricity Bill
Rent Agreement + NOC

PAN Card

Passport size Photograph

Partnership Firm Registration Process

Partnership registration procedure is easy but a professional would be needed to complete the same. In addition, the procedure has been completely changed by the government in order to promote the ease of doing business. TaxxInn is experienced in Partnership registration with an experience of registering more than 800 Partnership and consulting thousands of Partnership throughout India.

Contents of Partnership Deed:


  • Name of the partnership firm.
  • Basic details of the partners.
  • Starting date of the business.
  • Period of the firm's existence.
  • Capital invested by each partner.
  • Profit and loss sharing ration.
  • Intrest for the capital which is payable to partners.
  • Borrowing limitations of each partner.
  • Remuneration to the partners, If any
  • The process of the admission of a new partner and the retirement ofa partner.
  • Preparation of firm accounts.
  • The process to be followed in case of a dispute between partners.

HIGHLIGHTS

Limited Liability

Concept

Partnership firm is a business form in which 2 or more individuals can join hands to do business.

Separation of Mangement & Shareholders

Easy Formation

Partnership firm can be easily & quickly registered in comparision to other form of business.

Separate Legal Entity

Low Cost Registration

As comparison to other business form, cost of registering partnership firm is very low.

Perpetual Succession

Tax Benefit

More Tax Saving as compare to sole proprietor business form.

Easy Equity Funding

Sharing of Risk

Individuals having same business goal can form and share risk & rewards.

Taxation

Compliances & Disclosure

Least compliance & disclosure required as compare to other business form.

FAQs on Sole Partnership Firm

Minimum 2 members are required to start a partnership firm.
Yes, the partner's residential address and office address can be the same.
The partner of the business should be a citizen of India and a resident of India.
There is no minimum capital required to start a partnership firm. Therefore, the business can be started with any amount of capital.
No, a partnership firm is not a separate legal entity as both business and the owner are the same.
  • Lack of Resources.
  • Unlimited Liability.
  • Lack of Credibility.
  • It cannot raise funds easily.
  • Can not add Partners
Yes, a partnership firm can be converted into a private limited company
Once the partnership deed is prepared and taken a print. One has to reach a lawyer who will notarize the deed.
No, registering of the partnership deed is optional. Most of them don't register as it involves the cost of registering.
There is no registration certificate for a partnership firm. One can take MSME or GST can be taken.

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Types of Government Registrations

Recommended For

Ease of Accommodating Investment

Limited Liability Protection

Tax Advantages

Perpetual Existence

Statutory Compliances

Private Limited Company
Limited Liability Partnership
One Person Company
Partnership Firm
Sole Proprietorship

Start-ups and growing companies

Very easy to accommodate

Yes

Few benefits

Yes

High

Professional services firms

Possible, but unlikely

Yes

Most efficient

Yes

Low

Sole promoters

Possible, but severely unlikely

Yes

Few benefits

Yes

High

Home businesses

Almost impossible

No

Minimal

No

Minimal

Small traders and manufacturers

Impossible

No

Minimal

No

Minimal

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