What is the Procedure of Partnership Firm Registration?

Procedure of Registration Of Partnership Firm

Partnership Firm is a combination of multiple partners who ties up together for operating a Firm. It is one of the most favorable forms of working as it includes sharing of profit and loss, diversion of management and much more.

Under The Indian Partnership Act (1932) (referred to as Act hereafter), it is not mandatory to register your Partnership Firm to the Registrar but it is a lead point if a Partnership Firm has a legal Identity. 

Table of Content

1. What is Partnership Firm Registration?

2. Procedure of Registration of Partnership Firm.

3. Importance of Partnership Firm Registration.

4. Conclusion

5. FAQs.

Partnership Firm Registration

A Partnership is a formal agreement between two or more partners to manage and operate a business and share its profits. When two or more partners share their Ideas and come up together to run a Business/Firm is also referred to as Partnership Firm.

When Registration of the Partnership Firm is done to the Registrar of the firm by following the procedure and with proper documentation is known as Partnership Firm Registration. Different states have different processes and fees for the Registration.

Procedure of Partnership Firm Registration

The procedure of the registration differs from state to state. We can study the process by following these simple steps:

Step-1: Choose a name of the Partnership Firm

The first step is selecting a name for your Partnership Firm, The Name Must reflect the Partnership Firm’s Vision, Every Firm is established with the main objective and clear vision. It operates with a purpose of fulfillment of such a mission and aim.

Things to keep in mind while Choosing a name for the Partnership Firm:

• It should be Unique.

• Simplicity is the Key.

• There should be availability of the name.

• The name should not collide with the presented Firm in the Domain.

• The name must not be Offensive.

Step-2:  Draft a Partnership Deed

A Partnership Deed is a legal Agreement or Contract which involves terms and conditions on how to operate the firm with mutual understanding of the partners.

Important factors to be noticed while drafting a Partnership Deed:

• It should be Drafted with mutually beneficial relationships.

• Partners profit sharing ratio should be mentioned.

• Name and address of the firm and of the respective partners.

• Business commencement Date to be highlighted.

• Accounting period of the firm.

• Duties, Powers, Responsibilities, Rights and Liabilities each of partners to be specified

• The Deed is to be signed by all partners along with 2 witnesses.

Step-3: Apply for a PAN 

PAN is a Permanent Account Number. It is important for a Firm to Apply for a PAN to the Income Tax Department as it is required to fulfill the obligation of Tax.

Step-4: File an Application for Registration

Application for Registration should be filed to the Registrar with proper details that are:

• Name and address of the Firm.

• Details of the Partners.

• Commencement date of the Firm.

Step-5: Submission of Documents

Along with the registration application, the following documents should be submitted to the Registrar as a part of the registration process:

• Application for registration of partnership (Form 1).

• PAN Card on the name of the Firm.

• Partnership Deed.

• Address proof of each of the Partners.

• Copy of Affidavit.

Step-6: Payment of Registration Fees

Stamps are required to approve the documents whereas you need to clear all the dues fully at the time of submitting the documents to the Registrar. 

At Professional Utilities the fee is ₹11,999/- but the fee varies from state to state depending upon the stamp duty charges.

Step-7: Finalizing and Legalizing the Partnership Deed

You should finalize the deed based on the Mutual Understanding between the partners based on the preferences of each of the partners and then it should be Legalized.

The deed should be provided in a written document with an approval of stamp to each of the partners and one copy of the deed should be signed by all the partners in front of the registrar.

Step-8: Certificate of Registration

After completing the whole process of Partnership Firm Registration. You can ask for the Certificate. The partnership firm is required to add ‘(Registered)’ after its name from the date of registration.

The Registrar will examine all the documents thoroughly and get satisfied with the procedure, he/she will lay out the Certificate.  
 

Importance of Partnership Firm Registration

The Importance of Partnership Firm Registration can be determined as follows:

• Sharing of Loss and Profit: As the name suggests Partnership Firm, Partnership refers to the meaning when two or more people tie up together for operating a business. Thus, the profit and loss will be shared among them.

• Legal Recognition: The Certificate will provide you a separate Identity and recognition in the specified domain.

• Right to take action: The registered firm can file a complaint on an external party for breaching any rules. As there is a mutually beneficial relationship between the partners. 

• Cost Effective: Partnership Firm works under a Combination of multiple partners as there is sharing of profit and loss there is also a division of Investments.

Conclusion

Registration of a Partnership Firm is a complex task as it includes various approvals and licenses to be availed from the government. After filing the application it is important to create a partnership deed and get it approved by all the partners.

We cannot deny the fact that the procedure of Registration of Partnership Firm is Complex but you can avail this process hassle free with Professional Utilities at ₹11,999.

Why Professional Utilities?

At Professional Utilities, we leverage our industry knowledge and expertise to help businesses navigate complex regulations, minimize risks, and optimize operations for maximum efficiency and profitability.

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What is the Registration Process of a Partnership Firm?

Choose a name of the Partnership Firm,Draft a Partnership Deed,Apply for a PAN,File a Application for Registration,Submission of Documents,Stamp duties and Fees,Finalizing and Legalizing the Partnership Deed,Certification of the Registrar.

What is the fee for the Partnership Firm Registration?

It starts from ₹11,999/- at Professional Utilities.But the fee differs from state to state.

What are the documents required in the Partnership Firm Registration Process?

PAN card,Partnership deed,Address proof of the firm as well as of the partners, Affidavit.

What time is required in the Registration Process of a Partnership Firm?

It takes around 7-10 working days to register a partnership firm in India.

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