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As per the Partnership Act 1932 - Section 4, Partnership company registraiton is known as a legal relationship between the persons agreed to the share. Either all member or any individual one, can handle the profit for everyone. A "partnership deed" is a legitimate document that is created to form a partnership firm. In India, a supreme law that is Indian Partnership Act 1932 regulates the partnership firms. According to the act Partnership is the relation among partners/individuals who agree to share the profits of the business as equal and the same for all. The minimum count of partners is 2 and there is no set limit for the maximum number.
Before commencing a partnership firm you must know that partnership firms are not separate legal entities. The partnership firm can't be debtor or creditor plus own property. The partnership deed needs to mention "amount of profit or losses share between partners", to avoid future interruptions. So partnership deed registration is required. The partnership firm dissolves in some cases that is the number of partners decreases below 2 in case of death, incapacitation or withdrawal of a partner.
Benefits of Partnership Firm:-
1. Incorporated on the basis an Agreement:-
Partnership firm gets into existence on the basis of an agreement between 2 or more partners agreeing to begin the business. The terms and conditions documents of such partnerships are mention in a certificate known as the Partnership Deed. We offer the partnership deed registration online. So, you can easily log into our website.
2. Distributing profit and loss among partners:-
Partners are authorized to share the profits and bear the losses if any in the field of business. As there is no separate legal entity and in case of loss the partner's personal asset is taken into account.
3. Unlimited Liability of Partners:-
All Partners is individually liable for all losses resulting in the course of business. All the above, all assets can be utilized to pay off the outstanding debts of the partnership firm.
4. Combined Management :-
Every partner is authorized to participate in the day to day progress of the business. Also, partners operating the business requirements to take the approval of other partners for making the imperative decisions.
5. Duration of Partnership Firm :-
The partnership Firm may last as long as the partners want to do so. But, as per law, the partnership can come to an end if any of the co-workers dies, resigns or becomes bankrupt.
Documents required for partnership firm registration
For online registration of partnership firm applicant must submit the following documents
- Form 1: Application for registration under Partnership Act
- ID Proof & Address of all partners (PAN/Aadhaar/ Driving License/ Voter ID/ Passport)
- Telephone bill, Electricity Bill, Water Bill address proof of the office of Partnership.
- Original copy of Partnership Deed, signed by all partners
- Affidavit declaring that you are willing to become a partner
- Rental or lease agreement of the property ( As a proof of principle place of business)
These are the necessary documents required for partnership firm registration. After this partnership firm process and procedure is easy to understand and follow.
Importance of Partnership Deed
A Partnership Deed is a document in which mentions all the terms and conditions of each & every partners in a partnership. The Partnership deed consists of the following components as below:
- Name of the Firm and Partners and their address
- Type of Business of the Firm
- Start date of business or firm
- Duration of Partners (whether for a project/ fixed time).
- The profit-sharing ratio between the partners.
- Capital contribution from all partners.
Procedure for Registration of Firm:-
Step 1:- Fill up the application form
In this form, you have to mention the details of the business and partners' personal details. Plus you have to mention the Name of your partnership firm along with "Co." suffix at the end of the name. However mentioning “Co” is not compulsory you may use “Enterprises, Associates, Trading Co., etc except Limited, Private Limited, Foundation, Chaamber.
Step 2:- Document required
Before submitting the names of your partnership firm it's important to check them carefully through online software. Where in you can see the availability of names. Give 2-3 names for name approval with MCA.
Step 3:- Drafting Partnership Agreement
Our expert team drafts a partnership agreement for you wherein all the specifications by the partners are specified. You can verify all the documents and the partnership agreement. After all the preparations the final application is forward to the registrar of firms.
Step 4:- Partnership Firm Registration Certificate
Complying to all the guidelines of Indian partnership Act. A certificate of Registration is then issued, by the registrar of firms and a copy should be given to all the partners. Along with PAN & TAN of the firm with opening of a bank account of your partnership firm.
Tax compliances for Partnership Firm in India
It is necessary for partnership firms in India to get Permanent Account Number and Tax Deduction Account Number. Both of these issue from the Income Tax Department after Partnership Firm Registration. Partnership Firm has to register a return of income irrespective of the profits or losses. For all partnership firms, the income tax rate on the entire income will be 30% and surcharge on income tax.
