How To Register A Partnership Firm

The Indian Partnership Act of 1932 controls and regulates partnerships in India. Partners are the individuals who join forces to form a partnership firm. The partnership firm is formed through a contract between the partners. A partnership deed is a contract between partners that governs their relationship as well as their connection with the partnership firm.

What exactly is Partnership Registration?

Partnership registration is the process of registering a partnership firm with the Registrar of Firms. The partners must register their business with the Registrar of Firms in the state where it is located. Because partnership firm registration is optional, the partners may apply for it at the moment the firm is formed or at any point during its operation.

Partnership registration requires two or more people to form a partnership, agree on a firm name, and sign a partnership deed. Partners, however, the partnership relationship emerges from contract rather than status; for example, members of a Hindu undivided family carrying on a family business as such, or a Burmese Buddhist husband and wife carrying on business as such, are not partners in such a business.

How to Register a Partnership Firm

• An application form (Form 1) must be sent to the Registrar of Firms of the State in which the firm is located, together with the required payments. It must be signed and validated by all partners or their representatives. The application form (Form 1) can be received at the Registrar of Firms’ office or downloaded from the relevant state’s Registrar of Firms website.

1. The application, which includes the following information, can be sent to the Registrar of Firms via post or personal delivery.
2. The firm’s name.
3. The firm’s main office.
4. The location of any other places where the company does business.
5. The date on which each partner joined.
6. The names and permanent addresses of all partners.
7. Firm duration.

• Choose the Name of the Partnership Firm: A partnership firm may be known by any name. However, certain conditions must be met while selecting the name:

1. The name should not be too similar or identical to an existing firm in the same industry.
2. The name should not include words like emperor, crown, empress, empire, or any other phrases that imply government permission or support.

• If the Registrar is pleased with the registration application and documentation, he will enter the company into the Register of Firms and issue the Registration Certificate. The Register of Firms contains current information on all firms, which anybody can access for a charge. An application form, including payments, must be submitted to the Registrar of Firms in the state where the firm operates. All partners or their representatives must sign the application.

The importance of registering a partnership firm.

The Indian Partnership Act makes partnership firm registration optional rather than mandatory. It is entirely at the partners’ discretion and voluntary. The firm can be registered at the time of creation or incorporation, or while the partnership is still in operation. However, it is usually better to establish a partnership business because registered partnerships have specific special rights and privileges over unregistered partnerships. The advantages that a partnership firm has:

• A partner may sue any partner or the partnership firm to enforce his rights under a contract with the partner or firm. In the case of an unregistered partnership firm, partners cannot sue the firm or its partners to assert their rights as per section 69 of the Partnership Act 1932.
• The registered firm may sue any third party to enforce a contractual right. An unregistered business cannot sue a third party to enforce its rights. However, any third party may sue the unregistered firm.
• The registered firm might seek set-off or other legal action to enforce a contractual entitlement. In any litigation against the unregistered firm, set off cannot be claimed.

REQUIRED DOCUMENT

PAN card of the firm & Partner

PAN card for the firm and partner- Partners must apply for the firm’s PAN. To apply for a PAN, complete Form 49A. It should be performed online by going to the NSDL website. It can be filed online if the authorized partner signs the application using a digital signing certificate. Otherwise, the application and required papers must be sent to the nearest PAN processing centers across the country. All partners in the firm must own a PAN card. It provides proof of identity for the couple. Partners who do not have a PAN card can obtain one by completing Form 49.

Address Proof of Firm & partners

If the registered office space is rented, a rent agreement and one utility bill (e.g., electricity, water, property tax, gas receipt) must be provided. In addition, the landlord’s NOC will be submitted. If the registered office is owned, a utility bill bearing the owner’s (partner’s) name must be shown. Additionally, a NOC from the owner must be submitted. All partners in the firm must provide any government-issued address documentation. Voter ID, driver’s license, Aadhaar card, passport, or utility bills that are no more than two months old can be used as address proof.  

GST Registration

To obtain GST registration, a company must provide its PAN number, address proof, and the identification and address proof of its partners. An authorized signatory will sign the application with either a digital signature certificate or E-Aadhaar verification.

In India, registering a partnership firm can take 10 to 14 working days. However, the period required to produce a certificate of incorporation may vary depending on the requirements of the relevant state. The government processing time for registering a partnership firm varies by state.

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