This article is related to the meaning of partnership firm and its advantages. In addition to this, it also states the procedure of incorporating a Partnership Firm.
Partnership firm is an association of two or more persons who have agreed to come together with each other and share the profits of the business earned by all or any one of them. The partnership firm is not separate legal identity from its members. Further, the partnership firm is incorporated on the basis of the partnership agreement.
In India, it is not mandatory for the partnership firm to obtain a registration thus it is the choice of the partners to obtain registration or not. However, it is always advisable to obtain a registration for the partnership firm.
Documents Required for Partnership Registration -
Following documents are required for the incorporation of partnership firm-
- Form 1 with prescribed fees.
- Notarized copy of partnership deed.
- Proof of ownership or rent/lease of the location of your business.(e.g. Electricity Bill/ Water Bill or Rent/Lease/Leave and Licence Agreement of Business Place)
- Copy of PAN Card of partners
- Copy of Aadhaar Card/ Voter identity card
Procedure of registering Partnership firm -
Step-1 Application for the name availability
An appropriate name must be chosen for the partnership firm. Initially, two or more names shall be chosen. Further, the name chosen must be unique and should not be identical with the name of any existing firm. In addition to this, the guidelines specified by MCA shall also be kept in mind before selecting an appropriate name.
Step-2 Creation of Partnership Deed
The partnership deed is a document that contains the respective rights and obligations of the members of a partnership. A partnership deed agreement may be written or oral. However, practically oral agreement does not have any value for tax purposes and therefore the partnership agreement should be written. Further, following are the mandatory contents of a partnership deed:-
- Name and Address of the firm as well as all the partners
- Nature of business to be carried on
- Date of Commencement of business
- Duration of Partnership (whether for a fixed period/project)
- Capital contribution by each partner
- Profit sharing ratio among the partners
Step-3 Submission of documents
An application form and the prescribed fees are required to be submitted to the Registrar along with the below-mentioned documents-
- Through FORM 1 application for Registration of Partnership shall be filed.
- Duly filled specimen of affidavit
- Certified True Copy of the Partnership Deed
- Ownership proof of the principal place of business or rental/lease agreement thereof.
The application or statement filed must be signed by all the partners, or by their agents especially authorized in this behalf.
Step-4- Certificate of registration
As soon as the registrar is satisfied with the points stated in the partnership deed, he will record an entry of the statement in a register called the Register of Firms and issue a Certificate of Registration.
