Partnership Firm Registration
Do you know that a General Partnership consists of a minimum of two people who agrees to manage a business based on the terms and conditions set in a Partnership Deed? What are you waiting for! Start your Partnership Firm swiftly with our experience of 6+ years of delivering quality professional services in the Legal Fraternity. We will extend our support to register your partnership firm across India along with Documentation, Preparation, filing, and subsequent Follow-up with the registrar of firms.
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Overview of Partnership Firm Registration
A Partnership refers to a business structure that attracts minimal risk & has better legal stability. A partnership firm is formed by two or more people with the help of a partnership deed. The said agreement lays down the legalities of the business and the profit ratio of the partners. Such entities are easy to form owing to the presence of minimal compliances. The Indian Partnership Act, 1932 regulates the partnership-based entities in India. The involved parties responsible for the formation of a partnership firm are regarded as partners.
Notable Benefits of LLP
The following section manifests the benefits of an LLP-based entity:
Separate legal entity
An LLP rejoices the independent legal status, just like companies. The LLP holds different status from its partners. Such entities have the right to sue the third party in case of legal dispute and vice versa. The
The contracts are signed in the LLP’s name, which aids to foster the trust of various stakeholders and renders the end-users and vendors a sense of confidence in the business.
Limited liability of the partners
The partners of such entities have limited liability. The partners’ liability is limited to the agreed contribution to the company. This indicates that they are accountable to pay only the quantum of contributions made by them and are not personally obligated to address any loss in the business. If an LLP ends up insolvent during winding up, only the LLP assets are liable for compensating its debts. The partners possess no personal liabilities, and therefore they can operate as credible businessmen.
Low cost as well as minimal compliance
The cost of incorporating an LLP is quite low compared to other business structures such as private and public limited companies. Also, the quantum of compliances is on the lower side for these entities. The LLP is mandated to file only two statements yearly basis, i.e. Statement of Accounts and Solvency and an Account return.
No scope of minimum capital contribution
The LLP can be incorporated in the absence of any minimum capital. Also, there is no requirement of procuring any amount of capital contributed by the concerned partners.
What type of Documents are Required to Register an LLP in India?
Here are the listicles of mandatory documentation that are required during the registration of LLP in India;
PAN Card/ Identification Proof Of Proposed Partners: All proposed partners are mandated to furnish their PAN during registration time. PAN card serves as a fundamental ID proof.
Partners’ Address Proof: Proposed partner furnish any one document out of passport, Voted ID, DL, or Aadhar Card. Name as well as other information as per address proof & PAN card ought to be exactly the same.
Any Flaws In The Details Of The PAN Can Be Corrected Before Furnishing To RoC.
Partners’ Residence Proof –Updated bank statement, utility bill, should be furnished as residence proof. Such bills should be the latest one, i.e. not older than 2-3 months & must entail the partner’s name as cited in PAN card.
Photograph – Partners must furnish the latest passport size photo, preferably on white background.
Passport (In Case Of Overseas Nationals/ NRIs) – To become a partner of Indian-based LLP, overseas nationals & NRIs have to furnish their passport mandatorily. Passport must be notarized by the concerned authorities in the nation of such foreign nationals and NRI, else Indian Embassy located in the nation can also sign the documents.
Foreign nationals or NRIs must facilitate address proof, bank statement, and legit identity proof enclosing the address.
If The Documents Exist In Any Other Language, The Applicant Must Facilitate The Notarized Translation Copy.
Registered Office Address Proof: Registered office proof must be furnished during the registration process or within 30 days of incorporation.
If the registered office is rented, a rent agreement and a NOC from the actual land owner have to be furnished. NOC shall be the landlord’s consent to permit the LLP to use the premises as a registered office’.
Also, anyone document out of gas, electricity, or telephone bill should be submitted. The bill should not be older than two months and must reflect the address of the premise and the owner’s name.
Digital Signature Certificate (DSC): One of the designated partners must hold DSC for signing the documents electronically.
Checklist for LLP Registration
- Minimum of two designated partners DSC of all the partners
- DPIN of all serving partners
- Name of the entity, which is not identical to any prevailing company or trademark
- The capital contribution made by the serving partners of the LLP
- LLP Agreement
- Proof of registered office of the LLP
Step-by-Step procedure of registering a Partnership firm in India
Following is the detailed procedure of legalizing a partnership firm in India:
Step 1: Application for Registration
An application form must be filed to the ROFs of the respective state in which the Firm is situated and the standard fees. The registration form should enclose the signature of the proposed partners.
Usually, an applicant can send the application form to the ROFs via registered post. Refer to the below checklist before dispatching the application to the said authority. The checklist encloses the mandatory details that should be enclosed in the application form.
- Proposed Firm’s name
- The principal Place of business
- Address of the ancillary unit, if any
- The date of joining of each partner
- The names & addresses of the proposed partners
- Year of the establishment of the Firm
Step 2: Choose the legalized name of the Firm
Keep the following points in mind for selecting a suitable name for the proposed Firm;
- The name should not create a conflict of interest with any third parties or the existing Firm.
- The name should be distinctive and original.
- The name must stay in line with prevailing Act like Trademark Act and Emblem and Name Act, 1950.
Step 3: Certificate of Registration
If the Registrar finds no error in the submitted form & documents, he will grant the registration certificate & register the proposed firms in the Register of Firms.
The register of firms encloses all the details of the registered Firm and is accessible to business owners, i.e. partners, after the submission of the standard fees.
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Here why ApkaTax is treated as the prevalent contender in the licensing regime?
- Comprehensive support for clients seeking seamless delivery of license
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Frequently Asked Questions
The registration of a partnership firm can be done in one to two weeks. However, the said time frame could vary in accordance with the regulations of the concerned state.
A partnership firm may cease to exist in the following cases:
- Absence of a partnership deed
- Partners fail to conduct business in accordance with the underlying object of the Firm
- Business undertakings of the Firm seem illicit
- Insolvency of the partners
Dissolving a partnership firm simply refers to a discontinuation of a business under the name of the said Firm. In this scenario, all liabilities are addressed either by selling off assets or transferring them to the concerned partner, settling all accounts with the partnership firm.
Common events in which partners can opt for partnership firm dissolution are;
- Death of partner
- Expiry of the partnership tenure
- Completion of a task
If all the partners want to dissolve the Firm on priority, they can proceed accordingly pursuant to clauses mentioned in the deed. That is the easiest and safest way to dissolve a partnership firm in India.
In general, a partnership firm registration can be revoked. Dissolution usually comes to existence when all partners or all serving partners except one are declared insolvent. Another event in which such a possibility may come to life is the unlawful conduct of the firm or trade malpractice.
In general, every partner in a partnership is equally accountable for addressing loss or injury caused to any third party. Further, they are also liable to jointly confront the penalties imposed during the course of the business. In case of inter-business losses, the liability of the partners will remain the same, i.e. they are all required to compensate losses even if one partner causes such happening.
Well, from a legal standpoint, Partnership registration is an absolute necessity. The unregistered partnership firms are more susceptible to unexpected dissolution and have a weaker legal base.
Partnership firms are bound to comply with the provisions of the Partnership Act, 1932. The registration of such firms is in the hand of the Registrar of firms of the respective state.
Presently, GST registration is mandated for all sorts of businesses except NGOs. The applicability of GST depends on the annual turnover of the entity. The second criterion that decides the GST imposition is the inter-state supply.
The unregistered partnership firm does not have the following leverages which ultimately strengthen its legal standing;
- Suing defaulter in case legal dispute
- Access to possible tax exemption
- Seamless dissolution of Firm
- Clarity on rights and obligations