What is the procedure of Partnership Firm registration in India?

Partnership Firm Registration establishes a business entity with unlimited liability under the Partnership Firm Act, 1932. It is an ancient business entity whose value hasn’t dimmed over the years. Therefore, starting a partnership firm is considered wise for financial enterprises like CA firms or shops. This article explains the procedure to establish a partnership firm in India. 

Starting a partnership firm is a good choice for those seeking to start their first business. It acts as a decent business entity and provides benefits such as:

1. Cooperation between the partners,
2. Unlimited liability and,
3. A way to push forward in the business domain

However, keep in mind two things before starting a business entity like this;

1. You cannot set up this business entity on your own, and
2. You need to draft a partnership deed to create the groundwork for your business.

Taking these facts into account, here is the answer to how to register a partnership firm in India

How to register A Partnership Firm in India?

Fortunately, technology has removed the hassle-filled online registration of partnership firms. However, there are still states where the government is still going on with the offline procedure. Thus, the following points are to acquire the license without going online.

Step 1: Choose a suitable name for your partnership

When choosing a good title for your firm, make sure to select one that’s not similar to an existing partnership. Uniqueness is one aspect you must always maintain when naming your business entity. If you don’t abide by these rules, the government of India won’t let your firm see the light of day.

Step 2: Create a partnership deed

After naming your business entity, you must get in touch with a Chartered Accountant or a Company Secretary to draft a Partnership Deed. It’s a document that contains the following information that is necessary to operate your business entity:

1. Names and addresses of all the partners you have involved with your firm,
2. Contact details of these individuals,
3. The objective of your partnership firm,
4. Period of the partnership. How long you are planning for the partnership firm to exist.
5. The ratio of profit and loss sharing,
6. And, information about that each partner has contributed or will contribute to the firm

In addition to those details, the deed should also entail information about the remuneration payable if the firm makes more money than it projected earlier.

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Step 3: Get a PAN Card for your Partnership Firm

As a firm is an income-earning entity, it must obtain a Permanent Account Number from the Income-tax department. Therefore, you must apply online to acquire a PAN card for your Partnership firm. Offline application filing is also an option for you.

Step 4: Apply using the Partnership Firm Registration application form.

Fill the offline form for partnership firm registration. Provide details such as:

1. Name of the firm,
2. Address of the firm
3. Details about the directors of the firm,
4. And the date by which you intend to start your operations

Step 5: Submit the requisite documents.

Along with your application, you must submit the following documents:

1. Original copy of the partnership deed after its certification
2. Specimen of the affidavit
3. PAN card of the partnership firm
4. Proof of the address of the firm. Depending upon whether you own the place or have it on rent, you can provide the following documents:

1. 1. Provide sale agreement’s copy if you own the place of business,
   2. Or, Rent agreement and No objection letter from the original owner is necessary if you are renting.
2. PAN cards of all the partners

Step 6: Deposit the stamp duties and other fees

While submitting your application form and your document, don’t forget the pay the application processing charges. They will vary depending upon the state where you want to register your partnership firm.

Step 7: Sign the partnership deed.

Finally, it’s time to legalize the deed of your partnership firm. You can do that by making copies of the document equal to the number of partners of your firm. And then, proceed to take the signatures of every partner and deposit the original deed to the Registrar of Firms.

In the end, you will obtain the certificate of registration for your firm.

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Conclusion

Establishing a partnership can be a chore if you don’t know what steps to take. Therefore, with this article, we have attempted to make the process of incorporating a firm easier. If you have any questions regarding this process, consult with our experts.