Partnership Firm Registration
Partnership Firm Registration, Easily and Fast with VenueTax | Kolhapur
Partnership Firm Registration
A Partnership is a business structure in which two or more individuals manage and operate a business in accordance with the terms and goals set out in the Partnership Deed. Partnership registration is relatively easy and is prevalent among small and medium sized businesses in the unorganized sectors. For Partnership Registration, you must agree on a firm name and then establish a partnership deed. It is a document stating respective rights and obligations of the partners and to be valid it should be written and not oral. The terms of the Partnership Deed can be varied to suit the interests of the partners and can even be made contrary to the Indian Partnership Act, 1932 but if the Partnership Deed is silent on any point, then the provisions of the Act would apply.
There are two types of Partnership firms, registered and unregistered Partnership firm. It is not compulsory to register a Partnership firm; however, it is advisable to register a Partnership firm due to the added advantages. Partnership firms are created by drafting a Partnership deed among the Partners and VenueTax | Kolhapur can help start a registered or unregistered Partnership firm in Kolhpaur.
Under section 44(d) of the Act, a suit can be filed against the managing partner for dissolution of the partnership firm.
THE INDIAN PARTNERSHIP ACT’ 1932 Section.4 of the Indian Partnership Act, 1932 defines Partnership in the following terms: “ Partnership is the relation between persons who have agreed to share the profits of a business carried on by all or any of them acting for all.”
“Section 464 of the Companies Act, 2013 empowers the Centre Government to prescribe maximum number of partners in a firm but the number of partners so prescribed cannot be more than 100.The Central Government has prescribed maximum number of partners in a firm to be 50 vide Rule 10 of the Companies (Miscellaneous) Rules,2014.Thus, in effect, a partnership firm cannot have more than 50 members”.
Somethings to Know: Partnership Registration
Partner Cannot sue firm: A partner in an unregistered partnership firm cannot sue the firm for enforcing any rights under the Indian Partnership Act, 1932.
Cannot claim Setoff in a dispute with a third party.
The firm cannot sue third parties whereas the third parties would be able to sue the firm irrespective of registration.
Registration of Partnership Firm
The members of a partnership Firm may enter into a written contractual agreement, but such formality is not necessary. Generally, to determine whether a partnership existed, a court will ask whether there was a sharing of profits and losses, joint administration and control of the business, a capital investment by each partner, and common ownership of property. The court will also examine the intent of the parties. Partnerships are governed almost exclusively by state law—tax concerns and jurisdictional issues are the only notable exceptions. VenueTax will assist you to get registered under the law.
Yes, Partnership Firm Registration is a fully online process. As all documents are filed electronically, you would not need to be physically present at all. You would need to send us scanned copies of all the required documents & forms.
A partnership firm is a business structure in which two or more individuals manage and operate a business in accordance with the terms and objectives set out in a Partnership Deed that may or may not be registered. In such a business, the members are individually partners and share the liabilities as well as profits of the firm in a predetermined ratio.
A partnership firm is best for small businesses that plan to remain small. Low costs, ease of setting up and minimal compliance requirements make it a sensible option for such businesses. Registration is optional for General Partnerships. It is governed by Section 4 of the Partnership Act, 1932. For larger businesses, it has lost its relevance with the introduction of the Limited Liability Partnership (LLP). This is because an LLP retains the low costs of a partnership while providing the benefit of unlimited liability, which means that partners are not personally liable for the debts of the business.
The partners in a partnership firm are the owners, and thus, are not separate entity from the firm. Any legal issues or debt incurred by the firm is the responsibility of its owners, the partners.
A partnership must have at least two partners. A partnership firm in the banking business can have up to 10 partners, while those engaged in any other business can have 20 partners. These partners can divide profits and losses equally or unequally.
No, registration of a partnership is not necessary. However, for a partner to sue another partner or the firm itself, the partnership should be registered. Moreover, for the partnership to bring any suit to court, the firm should be registered. For this reason, it is recommended that larger businesses register the partnership deed.
A partnership firm can be registered whether at the time of its formation or even subsequently. The application for registration is to be made to the registrar of firms of the region in which the business is situated. It is advisable to get the firm registered as soon as it starts its business to avail the rights that can be enjoyed only by a registered firm.
The deed should contain names of the partners and their addresses, the partnership name, the date of commencement of operation of the firm, any capital invested by each partner, the type of partnership and profit-sharing matrix, rules and regulations to be followed for intake of partners or removal.
The name of a partnership firm should not contain any words which indicate the approval/support of the government other than a case where the government has given its written consent for the use of such words as part of the firm’s name. Key pointers:
- The names must not be too identical or similar to the name of another existing firm doing similar business.
- The name must not contain words like Crown, Emperor, Empress, Empire or any other word indicating government approval.
Partnership firm will have to file their annual tax return with the Income Tax Department. Other tax filings like service tax filing or VAT/CST filing may be necessary from time to time, based on the business activity performed. However, annual report or accounts need not be filed with the Ministry or Corporate Affairs, which is required for Limited Liability Partnerships and Companies