What Is Partnership Firm?
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Partnership Company registration in India is an arrangement between two or more people to conduct business operations together. In this type of partnership, profits and liabilities are shared among members, making it a common choice for small businesses and entrepreneurs.
A business established by two or more partners with the goal of achieving a profit is called a partnership firm registration. There are benefits to registering a partnership firm. The legal document used to establish a partnership company registration is known as a partnership deed.
The Indian Partnership Registration Act of 1932 is the primary governing partnership registration law in India. A partnership, as defined by the law, is a union of individuals who have consented to divide the profits from a company that they all, or any of them, act for a banking business. A partnership firm registration can only have a maximum of 10 members, whereas for other enterprises, it can have a maximum of 20 members.
While the partners are separate legal entities, partnership firms are not. A partnership firm registration is not permitted to be a debtor, creditor, or property owner. According to the law, the assets, liabilities, and credit of a partnership registration firm belong to the partners. To prevent future misunderstandings, the partnership agreement must specifically state how profits and losses will be distributed among the partners. Each partner is allowed to conduct business on behalf of the others.
Given its low expenses, simplicity of setup, and lack of stringent compliance requirements, it makes sense for some businesses, such as home-based ones that are unlikely to go into debt to register themselves as partnership firms. General partnerships have an optional registration process. To draft a current original partnership deed registration format, get in touch with our Vakilsearch experts right away. If there are fewer than two partners after a partner's death, incapacitation, or resignation, the partnership firm registration will be dissolved.
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Partnership Firm Registration
Advantages of Partnership Firm Registration Online
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Minimum Compliance
Whenever a private limited company is involved, something else always gets in the way (unless you hire someone to handle this for you). You avoid this hassle when you form a partnership. Seriously you don't want to start out your business burdened with compliance work. You simply want to concentrate on your company. -
Simple to Begin
One of the simplest types of businesses to launch is a partnership. In most cases, a partnership deed registration is the only necessity for register partnership firm in india. As a result, a partnership can be established today. On the other hand, an LLP enrollment would take between 5 and 10 working days to complete because the MCA must be contacted for the electronic signature, DIN, name approval, and incorporation. -
Comparatively Economical
You will have to pay at least ₹15,000 to establish a private limited company, not to mention compliance and auditor fees. When you're just getting started, do you want all this baggage? A partnership, however, will only set you back about ₹2,000.
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Documents Required for Partnership Firm Registration
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Registering a partnership firm in India is a common business structure that allows two or more individuals to collaborate and share responsibilities, making it essential to complete the necessary documentation and legal formalities for a smooth and compliant operation. Documents required for partnership firm registration are as follows.
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Partnership Deed
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Address Proof
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Identity Proof of Partners
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Passport-sized Photographs
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Address Proof of Partners
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Registration Certificate (if applicable)
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Bank Account Proof
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Specimen Signature
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Partnership Firm's PAN Card
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GST Registration (if applicable)
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Power of Attorney
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NOC from the Property Owner
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Affidavit
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Eligibility for Partnership Firm Registration Online
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Anyone with the legal capacity to enter into a contract may enter into the partnership agreement. Every individual who meets the legal requirements for majority, is of sound mind, and is not prohibited from contracting by any laws to which they are subject, may form a partnership.
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The following people are eligible to enter into a partnership
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1. Individual
A person who has the legal capacity to enter into a contract may join the partnership firm as a partner. An individual can be a partner in a company with more than two partners both as himself and as a representative known as Karta of the Hindu undivided family.
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2. Firm
Because a partnership firm is not a person, it cannot form a partnership with another firm or person. Yet, a partner in a partnership firm is free to form a partnership with another individual and split the firm's profits with his other parent company partners.
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3. Hindu Undivided Family
As long as the member has contributed their own effort and ability, a Karta of the Hindu undivided family may join a partnership in his or her individual capacity.
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4. Company
If permitted to do so by its goals, a business may join a partnership firm registration as a partner because it is a juristic person.
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5. Trustees
Unless its constitution or goals forbid it, trustees of private religious trusts, family trusts, Hindu mutts, and other religious endowments are legal persons and can thus form partnerships.
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Tax Compliances After Obtaining Partnership Firm Registration Online
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After the registration process for the registration of partnership firm is officially initiated, the partners of the aforementioned partnership firm must receive PANs Permanent Account Number and TANs (Tax Deduction Account Numbers) from the IT department
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No matter how much money is made or lost, a partnership firm in india must file an ITR (Income Tax Return)
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In the case of a register partnership firm, the total income will be taxed at a rate of 30% plus an additional income tax surcharge
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Furthermore, a tax audit must be performed by all partnership firms with a yearly revenue of over ₹100 lakhs.
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Businesses that generate more than ₹40 lakhs in annual income must register for GST online (₹20 lakhs in the case of the north-eastern states). However, businesses involved in e-commerce, market place aggregation, and export-import must register for GST in order to operate.
After registering for GST, the concerned firm is required to submit monthly, quarterly, and annual GST returns. Partnership firms must also submit their quarterly TDS (Tax Deducted at Source) returns, which must deduct tax at source in accordance with the applicable TDS rules and have TANs.
Last but not least, all partnership firms must obtain an ESIC registration and file an ESIC return.