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Partnership Registration

Partnership is an association two or more persons who have mutually decided to carry out business activities jointly and to share its profits as well as losses.

Minimum Requirement for Partnership firm:

 A minimum number of two partners who are adults.

 One of the partners of a Partnership firm has to be an Indian Citizen and Indian Resident.

 The other partner(s) can be a Foreign National.

  It is voluntary to register a partnership firm in the Indian Partnership Act, 1930

Advantages of Partnership firm Registration

Easy Formation

Formation of Partnership is easy. Even the registration of Partnership is optional, hence no legal formalities are required.

Flexbility

Partnership business is flexible, as suitable changes can be easily introduced whenever necessary.

Secrecy

The Statement of accounts of form need not to published and this ensures Secrecy.

Credit-worthiness

As the liability of partner is unlimited, severally and jointly, careful management of the business and this ensures the Credit-worthiness of the firm which in turn enables obtain credit form third parties easily.

Documents required to register a partnership firm

Documents From Partners

Identity Proof

 Permanent Account Number (PAN) Card

 Aadhaar Card / Passport / Driving License / Voter Identity Card

Passport size Photographs

Notes:

 All the Copies of documents must be Self-Attested by the applicant.

 In case of NRI or Foreign National, documents of director (s) must be apostilled.

Registered Office – Address

 Provide information about the address where the office of partnership firm shall be situated.

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Steps for registration of a Partnership firm:

Preliminary Requirements

 Select a suitable package.

 Provide basic details & documents required for registration.

 Make Payment through Secured Payment Gateway

Registration

 Drafting of Partnership deed

 Payment of stamp duty on deed

 Notary of partnership deed

Registered in Indian Partnership Act

 Application for PAN.

*Partnership deed will be registered with 10-12 working days subject to the government processing and approval.

Process for registration of Partnership firm:

Day 1-3:

 Provide basic details & documents required for registration.

Day 4-5:

 Drafting of partnership deed

 Payment of stamp duty on deed

 Notary of partnership deed

 Application for Allotment of PAN.

Comparison of different forms of organization

Particulars Sole Proprietorship Partnership Firm Private Company Public Company Limited Liability Partnership One Person Company
Act No specified Act Indian Partnership Act, 1932 Companies Act, 2013 Companies Act, 2013 Limited Liability Partnership Act, 2008 Companies Act, 2013
No. of Members Only one Minimum 2 to Maximum 50 Minimum 2 to Maximum 50 Minimum 7 to Unlimited Minimum 2 to Unlimited Only One
Registration NO Optional Mandatory Mandatory Mandatory Mandatory
Perpetual Succession NO No, if less than 2 partner Yes Yes Yes Yes
Management Control Sole owner Active Partners Board of Directors Board of Directors Designated Partners Sole member
Distribution of Profits Profit of owner Distributable as per deed As per subscribed capital proportion Distributable as dividend to Members Distributable as deed Profit of Sole owner
Liability Unlimited Unlimited Limited Limited Limited Limited
Minimum Capital Requirement Not specified Not specified No minimum capital is required 5 Lakhs Rs. 1/- No minimum capital is required
Taxation Slab Rates 30% 22% 22% 30% 22%
Compliances Less Compliance Moderate Moderate High Moderate Moderate
Formation Process Easy to Form Easy to Form Moderate Complex Moderate Moderate
Foreign Direct Investment Not allowed Not allowed Allowed Allowed Allowed Allowed