What is an Partnership? An Overview
Partnership Registration in India - A partnership is a business owned and operated by two or more individuals. In a partnership, the partners share the profits and losses of the business equally or as agreed upon in the partnership agreement. Partnerships can be either general partnerships, in which all partners are personally responsible for the debts and obligations of the business, or limited partnerships, in which some partners have limited liability. Partnerships offer more flexibility than a sole proprietorship, but they also come with more legal and financial responsibilities.
Features of an Partnership Firm
- One of the simplest types of businesses to launch is a partnership.
- A Partnership Firm is very easy to form. In most cases, a partnership deed registration is the only necessity for register partnership firm in india.
- There is no minimum capital required for Partnership Firm.
Benefits of an Partnership Firm
Shared responsibility
In a partnership firm, the partners share the responsibility of running the business and can divide tasks and decision-making among themselves
Shared profits
Partners in a partnership firm also share the profits of the business, which can be an incentive for partners to work hard and contribute to the success of the business.
Easy to set up
A partnership firm is relatively easy to set up in India. There are few legal requirements, and you can start your business with minimal paperwork.
Shared knowledge and expertise
Partners in a partnership firm can bring different skills, knowledge, and expertise to the business, which can be beneficial for the overall success of the business.
Easy to maintain
A partnershiop firm does not require to submit annual returns to the MCA.
Much less compliances
A partnership firm does not require Statuary Audit.
Eligibility Criteria to register an Partnership
To form an Partnership, one should meet the following criteria:
- A minimum of two partners are required to form an Partnership
- A Notarized Deed is essestial to form a Partnership Firm
- Partnership must have a unique name that should not be similar to any existing Company or Trademark and must not contain any offensive or reserved words
Documents required for Partnership Registration
Document Required for Partners
- PAN for Indian Residents
- Aadhaar Card or Voter's Card or Driving License
- Latest Bank Statement or Telephone bill or Postpaid Bill or Electricity Bill or Notarized Rent agreement
- Passport size photograph
Document Required for Registered Office
- NOC from Landlord/lady
- Notarized Rent Agreement
- Utility Bill
- Sale deed in case of Owned Property
Partnership Registration Process
Step 1: Drafting Partnership Deed
Partnerships require an Agreement called Partnership Deed to function. Draft a Partnership Deed ehich must include Duties and commitments of a Partner, Contributions of Partners as well as distribution of Profits and Losses of the Firm.
Step 2: Executing Partnership Deed
Get the drafted deed Notarized. A Partnership deed without notarizarion is not valid.
Step 3: Registering Partnership Firm
Though you can register the partnership deed as per The Indian Partnership Act, 1932 in your respective State Commerce Department, but it is not mandatory and is at the discretion of the partners. If you want your partnershiop firm get recognised as a startup or get legal status registering your partnership firm in the respective department is mandatory.
