Partnership Firm Registration

Partnership deed is basically a charter document for partnership business which lays down the terms of partnership, rights of partners, duties of partners and obligation to be fulfilled by each partner.

Partnership agreement may be oral or written but it is always advisable to have a proper written agreement between partners to avoid any future conflicts.

Differences between Partnership and LLP are as listed below -

PARTICULARS LLP PARTNERSHIP
Separate Legal Entity Yes No
Perpetual Successions Yes No
Composition of Ownership Minimum Partners : 2
Maximum Partner : No limit
Minimum Partners : 2
Maximum Partners : 10 in case of
Banking business-20 for other business
Comparisons of Directors/Designated Partners Minimum number of DP’s :2 No concept of DP
Name Name must end with LLP or Limited Liability Partnership No statutory requirement. Can mention word
“registered” after name (in certain states-including Maharashtra)
Common Seal Optional No concept as such
Agency Relationship Partners are agents of LLP but not of each other Partners are agents of firm of each other
Ownership of Assets LLP can own the assets Not being a separate legal entity, certain assets
can be legally held only in the name of partners.
Filing of Annual Returns Yes No
Audit of Account To be audited only if Turnover exceeds
Rs 40 Lakhs or Contribution Rs 25 Lakhs in any Financial Year
No specific provision under Partnership Act
Voting Rights Each partner shall have voting rights in
proportion to capital contribution or as
specified otherwise in LLP Agreement.
Each partner shall have voting right in
proportion to capital contribution otherwise
in Partnership Deed.
Dissolution Voluntary or by the Tribunal By Agreement, mutual consent, insolvency,
certain contingencies and by Operation of Law
Governing Statute and Agency Statute - The LLP Act,2008
Agency –Registrar of Companies
Statute – The Indian Partnership Act, 1932
Agency – Registrar of Firms
Conversion LLP cannot be converted to a firm but only into company Can be converted to a LLP and company
Creation Created by Law Created by Contract
Registratiod Compulsory Registration though advisable is optional
Charter Document LLP Agreement Partnership Deed
Related Party Transaction No Restriction No Restriction

Pre-requisite for Registration of Partnership

Minimum 2 Partners must be there

Clarity of Terms of Partnership including Profit sharing ratio and capital contribution decided

Proposed Name

Documents with respect to premises must be obtained

Goals and vision clarity must be there among partners

Documents Required

Self attested copies of PAN Card of all the partners

Self attested copies of Adhaar Card of all the partners

Self attested Passport/ Voter Identify Card / Driving License.

Passport size photographs of all the partners

Mobile No. and E-Mail id of all the partners

Proposed Name of Partnership Firm

Date of Commencement of Business

Duration of Partnership

Profit sharing ratio among the partners

Capital contribution by each partner along with mode of contribution

Description of activities to be conducted by Partnership Firm/ Nature of business to be conducted

In case of rented premises- Rent Agreement + Electricity Bill + NOC

Copy of Utility Bill Eg- Landline or Electricity Bill where the address of the Firm is to be situated (Shall not ne older than 2 Months)

Process of Incorporation

Obtaining necessary Documents

Preparation of Partnership agreement

Registering the Partnership with registrar of Firms

Pricing

Normal

Starting at Rs.4,999/- Onwards
  • Partnership Deed Drafting
  • 1 Lakh Capital
  • PAN Application
  • GST Application

Standard

Starting at Rs.12,999/- Onwards
  • Partnership Deed Drafting
  • 1 Lakh Capital
  • PAN Application
  • GST Application
  • Annual Accounting and Bookkeeping
  • Annual ITR Filing

Executive

Starting at Rs.19,999/- Onwards
  • Partnership Deed Drafting
  • 1 Lakh Capital
  • PAN Application
  • GST Application
  • Annual Accounting and Bookkeeping
  • Annual ITR Filing
  • GSTR 3B and GSTR-1 Filing

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Frequently Asked Questions

How many people are required to start a Partnership Firm?

A minimum of two Persons is required to start a Partnership firm. A maximum number of 20 Partners are allowed in a Partnership firm.

How to open a Bank Account of the Partnership Firm?

To open a bank account for a Partnership firm, a registered Partnership deed along with identity and address proof of the Partners need to be provided.

Does a Partnership Firm has certificate or Registration Proof?

If the Partnership firm is registered, the Partnership deed will be registered and a Registration Certificate will be issued by the Registrar of Firms.

Can other People invest in a Partnership Firm?

Indian Nationals and Indian Residents are allowed to invest in a Partnership firm without any approval. Usually those who invest in the Partnership firm become a Partner of the firm and in the absence of any agreement to the contrary, all partners will have a right to participate in the activities of the business.

Can I later convert my Partnership Firm into LLP?

Yes, there are procedures for converting a Partnership business into a Company or a LLP at a later date. However, the procedures to convert a Partnership firm into a Company or LLP are cumbersome, expensive and time-consuming. Therefore, it is wise for many entrepreneurs to consider and start a LLP or Company instead of a Partnership firm.