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Partnership Firm Registration

A partnership firm is an organization which is formed with two or more persons to run a business with a view to earn profit. Each member of such a group is known as partner and collectively known as partnership firm. These firms are governed by the Indian Partnership Act, 1932. Following are the characteristics of Partnership Firm:

1. Number of Partners : Minimum number of person required to start a partnership firm is two and maximum limit is 10 in case of banking business and 20 in case of all other types of business.

2. Contractual relationship: A written agreement known as partnership deed which is signed by all the partners, binds them in a contractual relationship.

3. Voluntary Registration: Registration of partnership firm is not compulsory. Since the registration provides various benefits to the firm thus it is desirable.

4. Competence of Partners: Every partner must be competent enough to enter into the partnership agreement. He should not be minor (in some cases minor can be admitted only to the benefits of the partnership), lunatic or insolvent.

5. Sharing of Profit and Loss: In partnership firm all the profits and losses are shared by the partners in any ratio as agreed. If it is not given then they share it equally.

6. Unlimited Liability: Liability of partners of a partnership firm is unlimited. They are jointly held liable for the debts and losses of the firm.

7. Legal Status: Partnership firm has no distinct legal status separate from its partners.

8. Transfer of Interest: No partner can transfer its interest in the firm to anybody without the consent of other partners.

9. Principal – Agent Relationship: This relationship is based on mutual trust and faith among the partners in the interest of the firm. Business of the firm may be carried on by all the partners or any one of them acting for all. According to this, every partner is an agent when he is working on behalf of other partners and he is the principal when other partners act on his behalf.

Partnership Benefits

  • Easy Formation

    Registration is not compulsory in the case of Partnership firm. It can be formed without any legal formality and expenses. Thus they are simple and economical to form and operate.

  • Easy Larger Resources

    Due the more number of members the partnership firm has larger resources for the business operations as compared to sole proprietorship.

  • Easy Flexibility in operation

    Due to the limited number of partners there is flexibility in the operations of business as the partners can amend any objectives or change any operations any time by mutual consent.

  • Better Management

    Business of a partnership firm is very well managed by all the partners as they take interest in the daily affairs of business because of the ownership, profit and control.

  • Sharing of Risk

    In partnership every partner bears the risks individually as it is easier compared to sole proprietorship.

  • Protection

    In a partnership firm interest of every partner is protected against any fraud.

Partnership Disadvantages

  • Instability

    A partnership firm does not exist for an indefinite period of time. The death, insolvency or lunacy of a partner may lead to dissolution of the partnership firm.

  • Unlimited Liability

    Liability of every partner in a partnership firm is unlimited as any of the partners may be called upon to pay all the debts even from its personal properties. A single wrong decision by one partner can lead other partners in heavy losses and liabilities.

  • Lack of Harmony

    According partnership agreement every partner has equal rights. Some situations might occur in which one or the other partner will not agree on the same thing which will cause difference of opinion resulting mistrust and disharmony among the partners.

  • Limited Capital

    Due to the restriction on the maximum number of members, a limited amount of capital can be raised.

  • No legal status

    A partnership firm does not have a legal status like a Joint Stock Company.

  • Not easy to transfer ownership

    In a partnership firm it is not easy to transfer ownership. Consent of every partner is required in order to transfer ownership.

How to Choose a Partnership Firm Name?

The partners forming part of a partnership business entity can at their will choose any name for their business. This is however subject to the following rules. As per section 58(3) of the Indian Partnership Act, 1932:

  • A partnership firm should not contain the following words in its name. These include Crown, Emperor, Empire, Empress, Imperial, King, Queen, Royal or other words that indicate sanction or approval by the government.
  • The name should not be too similar to any of the names of the existing firms engaged in similar businesses. The idea behind such a rule is to avoid injuring the reputation or goodwill of the existing firm if the new firm adopts a similar business name.

What Is Included In Our LLP Registration Package?

The Registration Fee charged by the ROF, Stamp Duty on the Agreement which varies for each state or union territory is not included in above pack and shall be charged separately on a case to case basis. You may request a customised quote from us.

Documents required for registration of an LLP

1. Address Proof of Firm
2. Address Proofs of Partners
3. Authority Letter to approve any person to apply for Registration
4. Notarized Partnership Deed
5. Notarized Photos of Partners*
6. PAN Card of Firm
7. PAN of Partners
8. Professional Tax Payment Receipt*

Procedure for Registration

Complete our Partnership Form

You need to fill our simple LLP online questionnaire and submit LLP documents.

Verification of Documents

For further procedures, details provided by you will be verified by our experts.

Partnership Deed Drafting

Further after submitting your documents we shall draft your Partnership deed.

Apply for TAN & PAN

We will create all the required documents and file them with ROF on your behalf.

Annual Compliances Requirements after the LLP Registration

After the finish of the formation process, LLP is expected to comply with the annual compliance requirements. These compliances are compulsory to meet irrespective of the fact that they have started a LLP or not. If the number of transactions after the LLP registration is 0, then LLP will record NIL return.

Following returns are expected to be registered:

  1. Statement of Account & Solvency
    2. LLP Annual Return
    3. Income Tax Return

Why Choose LegalSahayata?

Low Price

No Office Visit

No Hidden Cost

Charges After Work Completion

Frequently Asked Question

Yes, a name can be changed by sending a new application form along with a
Prescribed fee, duly signed and verified by all partners

No partner can file any suit against firm or other partners for the enforcement of the right & unregistered firm or its partner cannot claim a set-off.

All the Registers and documents along with notices statement and intimation filed shall be kept at the registered office and should be made available for inspection by any person on payment of a prescribed fee.

Unlike companies, a firm is not a separate legal entity. It has no legal identity separate from its partners.

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