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Know What is Partnership Firm ? and How it is registered?
A firm or company established between two or more partners with the goal of earning profit is called as a Partnership Firm.It is not compulsory to register a partnership firm but there are added advantages if a partnership firm is registered.Partnership deed is the legal document which is created to form a partnership firm.
Partnership Firm is hybrid of Company and Co-operative Society. It combines the goodness of a co-operative enterprise and vibrancy and efficiency of a company and accommodates the unique elements of cooperative business with a regulatory framework similar to that of a company.
Learn the basics about Producer Company & its compliance
A Registered Partnership Firm is a business structure where two or more individuals come together to run a business and share profits. Registration under the Indian Partnership Act, 1932 is optional but highly recommended for legal benefits. To register, partners must draft a Partnership Deed outlining business terms, capital, and profit-sharing, and file it with the Registrar of Firms along with required documents (PAN, address proof, etc.). A registered firm enjoys benefits like legal protection, the ability to sue, and tax advantages. However, partners have unlimited liability, making it riskier than LLPs or private limited companies.
An Unregistered Partnership Firm is a business formed by two or more individuals who come together to carry out a business with a shared goal of earning profits, but it is not registered with the Registrar of Firms under the Indian Partnership Act, 1932. While forming an unregistered partnership is simple and doesn’t require formal documentation, such as a Partnership Deed, it has several drawbacks. Unregistered firms cannot file lawsuits to enforce rights in court, limiting legal protection. Additionally, they cannot claim certain tax benefits, and partners remain personally liable for the firm’s debts.
See at the benefits of Partnership Company registration in India:
Partnership Firm registration process is very simple with Legal Panther. The whole procedure is completely online and one need not visit our office physically to get the Company registration.
Choose a Partnership Name and Structure Select a unique business name and ensure it's available. Decide on the type of partnership (General Partnership, Limited Partnership, etc.).
Draft a Partnership Agreement Create a written agreement outlining roles, responsibilities, profit-sharing, and dispute resolution methods. This helps avoid future conflicts.
Register the Partnership Depending on your jurisdiction, you may need to register your partnership with the local government or business registry. You may need to file a Doing Business As (DBA) name if your partnership name differs from the partners' names.
Obtain Required Permits and Licenses Apply for any required licenses, permits, or tax registrations based on your industry (e.g., business license, tax ID, sales tax, etc.).
Partners: Minimum 2 partners required (maximum limit depends on the country). Capital Investment: No minimum capital requirement. Agreement: A written Partnership Deed is essential.
Business Name & Address Details of Partners (Names, Addresses, Contributions) Profit & Loss Sharing Ratio Roles & Responsibilities of Each Partner Banking & Financial Terms Dispute Resolution Mechanism Firm Dissolution Terms
Registration of the Partnership Firm (Optional in some countries, but recommended) Apply with the Registrar of Firms or relevant business authority. Submit the Partnership Deed and required documents.
Open a business current account in the firm's name. Partners must sign a bank authorization letter. Maintain proper bookkeeping and financial records.
PAN (Permanent Account Number) – Obtain a business PAN card (India-specific). GST/VAT Registration – Required if turnover exceeds the tax threshold. Trade License – Issued by local municipal authorities (varies by business type).
Income Tax Returns (ITR) for the firm and individual partners. GST Returns (if registered under GST/VAT). Financial Statements & Audit (if turnover crosses limits set by law).
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