Partnership Firm
Alone we can do so little; together we can do so much.
1000+ Partnership firm incorporated since 2017
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Overview of Partnership Deed
A business established by two or more partners with the goal of achieving a profit is called a partnership firm. The legal document used to establish a partnership company registration is known as a partnership deed.
The Indian Partnership Registration Act of 1932 is the primary governing partnership registration law in India. A partnership, as defined by the law, is a union of individuals who have consented to divide the profits from a company that they all, or any of them, act for a banking business. A partnership can only have a maximum of 10 members, whereas, in other enterprises, it can have a maximum of 20 members.
While the partners are separate legal entities, partnership firms are not. A partnership company registration is not permitted to be a debtor, creditor, or property owner. According to the law, the assets, liabilities, and credit of a partnership registration firm belong to the partners. To prevent future misunderstandings, the partnership agreement must specifically state how profits and losses will be distributed among the partners. Each partner is allowed to conduct business on behalf of the others.
General partnerships have an optional registration process. If there are fewer than two partners after a partner’s death, incapacitation, or resignation, the partnership company registration will be dissolved.
What are the advantages of Partnership Firm?
- Minimum Compliance
- Minimum Compliance
- Comparatively Economical
Types of Partnership Firms In India
These are the two different kinds of partnerships.
1. Joint Venture at Will
A partnership by will is one in which the partners haven’t made any agreements regarding how long their partnership will last or how it will be decided.
2. Specific Partnership Registration
A specific partnership occurs when one person joins forces with another person in a specific business enterprise or for a specific business venture or undertaking, such as building a road, laying railroad tracks, etc. This kind of collaboration will dissolve after the task for which it was initially formed is finished.
What are the Documents Required for Partnership Firm Registration in India?
- Address Proof of Firm
- Address Proof of Partners
- Authority Letter to approve any person to apply for Registration
- Notarized Partnership Deed
- Notarized Photos of Partners
- PAN Card of Firms
- PAN of Partners
Our Services at a Glance
Partnership Firm Registration – FAQs
What is a Partnership Firm?
A partnership firm is a business structure where two or more individuals come together to carry out a business and share profits/losses as per the agreed partnership deed.
Is it mandatory to register a Partnership Firm?
No, registration is not mandatory, but a registered partnership enjoys more legal benefits (e.g., right to sue others in court).
What is a Partnership Deed?
A written agreement between partners outlining roles, profit-sharing, capital contribution, rules, and terms of the firm.
How many partners are required to form a Partnership Firm?
Minimum 2 partners are required.
Maximum:
- 50 partners (as per Companies Act limit).
Who can become a partner?
Any individual who is:
- An Indian citizen
- Above 18 years of age
- Mentally sound
Can an NRI or foreign national become a partner?
Yes, with prior approval from the RBI and government, subject to FEMA guidelines.
What documents are required for registration?
- PAN & Aadhaar of partners
- Passport-size photos
- Address proof of partners
- Partnership Deed
- Office address proof (rent agreement/utility bill)
- Affidavit and application form
How to register a Partnership Firm?
You must file an application with the Registrar of Firms (State-level authority) with required documents and fees.
How long does it take to register a Partnership Firm?
Typically, 7–10 working days, depending on the state and correctness of documents.
Is there any government fee for registration?
Yes, registration fees vary by state and are generally between ₹1,000 to ₹3,000 (excluding professional charges).
What is a registered vs unregistered partnership?
A registered firm is legally recorded with the registrar and has legal standing in courts.
An unregistered firm can’t sue third parties or partners in disputes.
Can a partnership firm own property?
Yes, it can own assets and property in the firm’s name if registered and the deed permits it.
Can a Partnership Firm be converted into LLP or Pvt Ltd?
Yes, the firm can be converted into an LLP or Private Limited Company with proper documentation and process.
Is PAN mandatory for a Partnership Firm?
Yes, a firm must obtain a PAN card in the firm’s name for tax purposes.
Is GST registration required for a partnership?
Yes, if turnover exceeds the threshold (₹40 lakh for goods, ₹20 lakh for services), or if doing interstate business, GST is mandatory.
What are the tax rates for Partnership Firms?
Flat 30% + surcharge and cess on total income (same as company tax rate under normal scheme).
Can a partner draw a salary from the firm?
Yes, the partnership deed can allow salary, interest on capital, and commission for working partners.
How are profits distributed among partners?
Profits are shared based on the ratio defined in the deed. If not mentioned, profits are shared equally.
Can a partner leave or be removed?
Yes, partners can retire, resign, or be removed as per the terms in the deed or mutual consent.
Can a Partnership Firm have a bank account?
Yes, after obtaining PAN and partnership deed, a bank account can be opened in the firm’s name.
What are the compliance requirements for a partnership?
- Income tax return (ITR-5)
- GST return (if applicable)
- TDS returns (if applicable)
- No mandatory ROC filings (unlike LLP/Pvt Ltd)
Can a partnership firm be registered under MSME or Startup India?
Yes. Partnership firms can be registered under Udyam (MSME) and Startup India, if eligible.
Is audit mandatory for a Partnership Firm?
Only if turnover exceeds:
- ₹1 crore (business) or ₹50 lakh (profession)
Otherwise, no statutory audit is required.
Can a partnership be dissolved?
Yes, by:
- Mutual consent
- Expiry of term
- Insolvency/death of a partner
- Court order
Deed should mention dissolution process.
What happens after dissolution?
Assets are liquidated, dues paid, and remaining profit or capital is distributed among partners.
Can a minor be a partner?
A minor can be admitted only for the benefit of partnership, not as a full partner with liabilities.
What is the difference between LLP and Partnership Firm?
Point | Partnership | LLP |
Legal status | Not a separate legal entity | Separate legal entity |
Liability | Unlimited | Limited |
Registration | Optional | Mandatory |
Compliance | Low | Moderate |