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Partnership Firm

Start your Private Limited Company (Pvt Ltd) Registration process online at the Reasonable Price.

₹ 5000/-

excl of GST  

What is Partnership Firm?

A partnership firm is a type of business entity in which two or more people collaborate to run a business with the shared objective of turning a profit. The Indian Partnership Act of 1932 establishes the legal foundation for the establishment and management of partnership firms in India. Mutual understanding and agreement between the partners, defining the responsibilities, rights, and profit-sharing plans, form the foundation of a partnership.

Each partner in a partnership contributes either capital, expertise, or both, and they divide the gains and losses according to a predetermined ratio. In contrast to a sole proprietorship, partnerships take advantage of the various abilities and assets of several people. Nonetheless, partners bear personal responsibility for the firm's debts and liabilities.

Although it is not required by the Partnership Act of 1932, having a formal written agreement is advised to prevent misunderstandings. The dissolution process, partner rights, and partner liabilities are all outlined in the legislation. Partnerships, even if they are easy to start, need mutual trust and good communication to function. Small and medium-sized firms frequently choose this legal form because of its adaptability and simplicity of setup.

Why We Need to Register as a Partnership Firm?

Registration as a partnership firm is essential for various reasons. First of all, it gives the company official identification and legal legitimacy. Better interactions with customers, suppliers, and financial institutions are made possible by registration under the Partnership Act of 1932, which grants credibility and transparency.
Having a registered partnership guarantees that the agreements about profit-sharing and partner rights and obligations are clear. By establishing a legal framework for conflict resolution, it protects each partner's interests and averts disputes.
Moreover, registration allows the partnership to avail various benefits and incentives offered by the government for small businesses. The partnership can also hold property, enter into contracts, and file or defend legal actions under the firm's name.

Advantages of Registering as a Partnership Firm

Checklist for Registering as a Partnership Firm

The following paperwork is normally required in order to register as a partnership firm in India:
1. Partnership Deed:
This is an important document defining the partnership's terms and conditions, including the names of the partners, their contributions, profit-sharing ratios, and other pertinent information. The deed must be written on stamp paper and signed by all partners.
2. Partnership Registration Application:
Prepare an application in the appropriate format, including facts such as the firm's name, major location of business, names and addresses of partners, and the year of business's inception.
3. ID Proof of Partners:
Submit identity proof documents of all partners, such as Aadhar card, passport, voter ID, or driver's license.
4. Address Proof of Partners:
Furnish address proof documents of partners, which may include utility bills, rent agreement, or property documents.
5. Proof of Business Address:
Provide documents verifying the business address, such as a utility bill or rental agreement.
6. PAN Card:
Obtain a PAN (Permanent Account Number) for the partnership firm.
7. Registration Fee:
Pay the prescribed fee for partnership registration, which may vary depending on the location and the capital contribution of the partners.
8. Form 1:
Complete and submit Form 1, which is an application for the reservation of the firm's name.
9. Affidavit:
Some jurisdictions may require an affidavit stating that the partners are not disqualified from entering into a partnership.
10. Consent of Partners:
Obtain the consent of each partner for entering into the partnership and for the use of their names in the firm.

Filings for Partnership Firm

1. Initial Actions:
  • Define the business structure and goals clearly.
  • Select a distinct and legally compliant company name.
  • Create a detailed partnership agreement stating the terms and conditions.
2. Gathering Documents:
  • Gather identification and address proof for all partners.
  • Obtain documentation that prove the business address.
3. Application Form:
  • Fill out the partnership registration application form completely.
  • Provide information about the company, its partners, and any other pertinent information.
4. Name Reservation (Form 1):
  • Submit Form 1 to the Registrar of Firms to reserve the desired business name.
5. Declaration and Consent:
  • Prepare affidavits proving the partners' eligibility.
  • Obtain written approval from all partners.
6. Fee Payment:
  • Pay the registration charge, which varies according to location and capital commitment.
  • Assemble and send the Registrar of Firms any necessary paperwork.
7. Submission to the Registrar:
  • Prepare affidavits proving the partners' eligibility. Gather and submit all necessary documentation to the Registrar of Firms.
8. Application of PAN and TAN:
  • Apply for the partnership's PAN and, if necessary, a TAN.
9. Certificate of Registration:
  • Obtain the partnership registration certificate after approval.
10. Opening a Bank Account:
  • Open a bank account in the name of the partnership using the registration certificate.

Compliance for Private Limited Company

1. Tax Compliance:

  • Follow tax requirements and file returns as needed.

  • Ensure that your taxes are paid on time.

2. Maintaining Records:

  • Keep proper financial records and books of accounts.

  • Documents relating to commercial transactions should be kept.

3. Annual Reports:

  • Submit annual returns and other relevant documentation to the Registrar of Firms.

  • Update any modifications to the partnership structure or business details.

4. Regulatory Compliance:

  • Comply with all applicable company laws and regulations.

  • Keep up to date on changes in legal requirements.

5. Partner Meetings:

  • Hold regular meetings with your partners to discuss business operations and choices.

  • For record-keeping purposes, take minutes during these sessions.

Closure for Partnership Firm

1. Dissolution by Agreement:

  • Partners agree to dissolve the partnership in accordance with the terms provided in the partnership agreement.

  • Create a dissolution agreement that specifies the terms of closure.

  • Make sure every partner signs the document.

2. Compulsory Dissolution:

  • Occurs when a specific circumstance specified in the partnership agreement causes the partnership to dissolve (for example, the death of a partner).

  • Follow the processes for compulsory dissolution provided in the partnership agreement.

3. Dissolution by Notice:

  • Partners notify the other partners of their plan to dissolve the partnership.

  • Follow the notification time outlined in the collaboration agreement.

  • During the notice time, settle all concerns and liabilities.

4. Dissolution by Court Order:

  • File a petition in court to dissolve the partnership.

  • The court may issue the order for grounds such as misconduct, incapacity, or chronic

    breach of the partnership agreement.

5. Winding up:

  • A liquidator is appointed by the partners to oversee the winding-up process.

  • A liquidator settles outstanding debts and liabilities.

  • The remaining assets are split among the partners in accordance with the partnership

    agreement.

Common Closure Steps:

1. Partner Agreement:

Obtain unanimous agreement among partners on closing

2. Agreement for Dissolution:

Create a dissolution agreement that specifies the terms, including asset and liability allocation.

3. Notification to the Public:

To notify creditors and other stakeholders, issue a public notice declaring the partnership's dissolution.

4. Debt Settlement:

Pay off all outstanding obligations and debts.

5. Distribution of Assets:

Distribute leftover assets among partners in accordance with the terms agreed upon.

6. Cancellation of PAN and TAN:

Terminate the partnership's Tax Deduction and Collection Account Number (TAN) and Permanent Account Number (PAN).

7. File Final Returns:

Complete the partnership's final income tax returns.

8. Registrar of Firms Notification:

Send a notification of dissolution to the Registrar of Firms.

9. Legal Formalities:

Finalize the paperwork and legal requirements needed for closing.

10. Liability Discharge:

Before ultimate closure, ensure that all liabilities are properly discharged.

Compliance for Private Limited Company

1. Board Meetings and Annual General Meetings:
As part of their compliance requirements, private limited firms must hold board meetings and an annual general meeting (AGM). There must be a record of these meetings' minutes.
2. Certificates of Compliance:
These documents attest to an organization's compliance with a number of legal criteria and may be imposed of companies.
3. Modifications to the Company Structure:
Regulatory organizations should be notified of any modifications to the company's structure, including changes to the registered office address, share capital, or directors.
4. Event-Based Filings:
When a significant event occurs, like a name change or a modification to the articles of association, a corporation may be required to file an event-based report.

Why SHR for Your Online Partnership Firm Registration?

Personalized Support:
Receive customized help from SHR pros. Your queries have been answered, and your specific company demands have been met. Trust us to be there for you, providing individualized support that is ideally tailored to your entrepreneurial journey.
Timely Updates:
SHR's timely updates will keep you informed and ahead of the curve! We keep you connected to vital information while guaranteeing that all updates are provided on time.
Document Security Assurance:
At SHR safeguarding your documents is our top priority. We secure your vital data with robust encryption and secure storage. Trust us to keep your important documents safe and confidential.
Prioritizing your financial well-being:
SHR prioritizes your financial well-being. Benefit from our cost-effective services that not only fulfill your demands but also save you money. We promote affordability and value in all of our services, so you may experience excellence without breaking the bank.
Time Efficient Process:
At SHR, we value your time. Our simplified and time-efficient services provide a smooth experience. From speedy processes to prompt responses, we are dedicated to saving you time and allowing you to focus on what is most important.
At SHR, we value your time. Our simplified and time-efficient services provide a smooth experience. From speedy processes to prompt responses, we are dedicated to saving you time and allowing you to focus on what is most important.

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