Partnership Firm

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Partnership Firm Registration

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Partnership Firm

Partnership Firm is one of the frequently used business structures in India, and it is very easy to establish, and compliances for a Partnership Firm is much lower compared to a company. A Partnership is an agreement between two or more parties or individuals to join together for a common goal. The Registration of Partnership Firm can be attained when the firm has a minimum of 2 people or individuals that are coming together to run the business on the terms that are decided.

The Indian Partnership Act, 1932 governs and regulates partnership firms in India. The persons who are involved in Partnership firms is known as partners. It is constituted under a contract between the partners. The contract between the partners is known as partnership deed which regulates the relationship among the partners and also between the partners and the partnership firm.

File an Application for the Registration
The partners of the partnership firm are required to file an application for the Registration of the partnership firm in Form 1. Further, the said application is filed with the Registrar of Firm (RoF) of the concerned state where the Firm is situated. Further, it is relevant to note that the application is required to be filed in the prescribed format, together with the specified fees.

Drafting of the Partnership Agreement
The partners of the proposed company must draft a partnership deed through mutual consent and it must be printed on a stamp paper . Partnership Deed acts as an essential document for the registration process.

Document drafting
After successful drafting of the deed, the given credentials as photocopies are required: Address and ID proof of the partners, Rental agreement in case of rental property, Authorisation letter furnished by the partner to authorise the professional. No objection certificate for own premises.

Verification
Further, once all the documents submitted and the application filed is closely verified by the authorities, and if no objection is found, then a Certificate of Registration will be issued to the said partnership firm.

Benefits of Partnership

The formation of a partnership firm is easy as compared to the other forms of business organisations. The partnership firm can be incorporated by drafting the partnership deed and entering into the partnership agreement.

It need not even be registered with the Registrar of Firms. A partnership firm can be incorporated and registered at a later date as registration is voluntary and not mandatory.

The partnership firm has to follow very few compliances as compared to a company or LLP. The partners do not need a Digital Signature Certificate (DSC), Director Identification Number (DIN), which is required for the company directors or designated partners of an LLP.

The partners can introduce any changes in the business easily. It is cost-effective, and the registration process is cheaper compared to a company or LLP.

The dissolution of the partnership firm is easy and does not involve many legal formalities.