Partnership Firm Registration
Effortless Partnership Firm Registration: We Handle the Legalities
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A Partnership Firm is a type of organization you can set up to run your business.
As such they need to be registered with the Ministry of Corporate Affairs (MCA) and are subject to relevant Rules and Regulations
Your Partnership Firm with Targolegal
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Step 1
An application for Registration of Partnership firm to be send to the Registrar Of Firms
Step 2
A duly signed copy of the partnership deed must be filed with the Registrar.
Step 3
Deposit the required fees and stamp duties with the concerned authorities.
Step 4
Issuance of Certificate of Incorporation by the registrar on approval of the application form.
Overview
Importance of Registration
Registration Conditions
Incorporation Process
Documents Required
What is a Partnership Firm
A Partnership is an arrangement where parties, known as partners, agree to cooperate, to advance their mutual interests. The partners in a partnership may be individuals, businesses, interest based organizations, schools, government or combinations. Organizations may partner together to increase the likelihood of each achieving their mission and to amplify their reach. A partnership may result in issuing and holding equity or may be only governed by a contract.
Overview
Importance of Registration
Registration Conditions
Incorporation Process
Documents Required
Importance Of Registration
Why registration as a partnership firm ?
If you are planning to start a new business, you have to first create a business entity which is legitimate in the eyes of the law. The type of business entity you choose will totally depend on various factors that include the size of the business, number of stakeholders, compliance costs and effort and acceptability in targeted markets.
Benefits of getting the Partnership Firm registered
i) Power to file suit against third Parties:
The partners of the registered Partnership Firm can file a case /suit against third parties for resolution of disputes arising during the course of business or any other matters relating to the Partnership Firm.
The partners of an unregistered firm cannot enforce any clause of the partnership deed in case of any third party disputes.
ii) Power to file suit against co-partners:
The partners of the registered partnership firm can file a case /suit against co-partners for resolution of any disputes arising between them.
The partners of an unregistered firm cannot enforce any clause of the partnership deed in case of disputes arising between co-partners.
iii) Power to claim Set-off:
The registration of partnership firms enables the partners with power to claim set-off. When any third party files a suit against the Partnership Firm, the Partnership Firm can claim the set-off, if any against the claim of the third Party.
The said power to claim set-off is not available when the partnership firm is not yet registered under the Indian Partnership Act, 1932.
iv) Higher Credibility:
A partnership firm which has completed the procedure of Online Registration of Partnership Firm enjoys higher credibility.
Although both registered and unregistered Partnership Firms are legal and valid under the given Act, the Registered Firm is highly preferred by authorities over unregistered one.
v) Conversion of Entity:
Conversion of a registered partnership firm is easier when compared to an unregistered firm . The conversion of the Partnership Firm into any other entity such as Private Company or LLP i.e. into a corporate structure can be easily completed in case of registered partnership firms.
Overview
Importance of Registration
Registration Conditions
Incorporation Process
Documents Required
Registration Conditions
How to Register your Partnership Firm?
Under the Indian Partnership Act 1932, a firm may be registered at any time by filling in an application with the Registrar of Firms. While the registration has its advantages, it is not compulsory for the parties to get a firm registered.
The maximum number of partners in a partnership firm holds a limit of 20. Partnership is a convenient entity to form when more than one business partner plans to come together for business purposes. However, similar to a Proprietorship, as a partner, you will remain personally liable for the company, unless it is a Limited Liability Partnership.
A Partnership deed is the primary document required for a Partnership firm, and its submission is compulsory for registration of the firm. Depending on the size and type of business, Partnership firms need to comply with a few regulations such as GST, TDS, ESI, PF norms, and others. Partnership firms will also have to undergo income tax assessment and audits.
Overview
Importance of Registration
Registration Conditions
Incorporation Process
Documents Required
Documents Required
Documents Required For Partnership Firm Registration
You need to have the following set of documents before proceeding for firm registration:
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Self attested PAN card copy of proposed Partners
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Self attested Address Proof of Proposed Partners (Passport or Driving Licence or Voters ID or Aadhar Card)
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Address proof of the proposed Registered Office (electricity bill or property tax receipt and rental agreement and It can be a residential property)
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No Objection (NOC) from the person who owns the property leased out to the firm.
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2 passport size photos of proposed partners
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Main objects of the proposed partnership firm.
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Proposed partnership firm name.
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Capital and shareholding pattern of partners.
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Profit and loss sharing ratio among the partners.
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Duration of the partnership firm.
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Date of proposed Commencement of business of the partnership firm.
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Name of Managing Partner in the firm, if any.
Overview
Importance of Registration
Registration Conditions
Incorporation Process
Documents Required
Incorporation Process
Steps to Incorporate a Partnership Firm
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Step 1: An application for Registration of Partnership firm to be send to the Registrar Of Firms
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Step 2: A duly signed copy of the partnership deed must be filed with the Registrar.
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Step 3: Deposit the required fees and stamp duties with the concerned authorities.
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Step 4: Issuance of Certificate of Incorporation by the registrar on approval of the application form.
Compare your options before going for OPC registration
Every entrepreneur/promoter should take the pain to know about the pros and cons of these legal forms before going for partnership firm registration in Bangalore
Do I need a Registration?
What type of business names can I keep?
How risky is it for me?
To what extent is each member of the business liable?
Tell me the
minimum membership limit
Is foreign ownership allowed?
How much will I get taxed
What are my annual tax filing norms?
Is Annual Audit Required?
Can I convert my business into any other legal form??
Compulsory Conversion to
Private Limited Company Applicable?
PARTNERSHIP
Yes. Register with Registration of Firms
Firm can use any name that he likes, but avoiding names already trademarked is advisable
Partners will stand liable for the liabilities of the business
Unlimited liability
2 People
No
Profits get taxed at 30% plus cess and surcharge. Is applicable
if profit exceeds 1 Cr
Only Income Tax must be filed for the income of firm and partners.
Only income tax audit is applicable if the turnover exceeds limit of 2 Cr
es, Partnership can be converted into a Private Limited Company or LLP.
NO
PRIVATE LIMITED
COMPANY
Yes, Ministry of Corporate Affairs registers Private limited company under the
Companies Act, 2013
Firstly, submit a set of names to Registrar of Companies, wait for approval from Registrar. Best practice is that the names submitted must be inoffensive, legal and not similar to any registered LLP’s
or companies
Private Limited Company is a separate legal person in the eyes of law, registered under Companies Act 2013. So, the shareholders are not responsible for business liabilities.
Liability is limited to his/her share capital contribution.
2 People
Yes
Profits get taxed at 25% plus cess and surcharge. Is applicable if profit exceeds 1 Cr
Every financial year Private
Limited Company must file Annual Accounts and Annual Return with the Registrar of Companies. Plus,Income
Tax must be filed separately.
Statutory audit is to be conducted irrespective of business transaction and turnover. Income tax audit is
applicable if turnover exceeds 2 Crs
Yes, Private Limited Company can be converted into a Public Company or LLP.
Even, Public Limited Company can be converted into a Private Limited Company.
NO
LIMITED LIABILITY PARTNERSHIP
Ministry of Corporate Affairs registers an LLP business
under the Limited Liability Partnership Act, 2008.
Firstly, submit a set of names to Registrar of Companies, wait for approval from Registrar. Best practice is that the names submitted must be inoffensive, legal and not similar to any registered LLP’s
or companies
“LLP” is a separate legal person in the eyes of law, registered under LLP Act 2008. So, the partners are not responsible for business’ liabilities.
Liable to the extent of their contribution (in money, in kind or in services extended)
to the LLP.
2 People
Yes
Profits get taxed at 30% plus cess and surcharge. Is applicable if profit exceeds 1 Cr
Every financial year Annual Statement of
Accounts &
Solvency and Annual Return with the Registrar.Plus, Income Tax must be filed separately.
Statutory audit is to be conducted if partners contribution exceeds 25 lakhs or turnover exceeds 40 lakhs. Income tax audit is applicable if turnover exceeds 2 Crs
Yes, Private Limited Company can be converted into a Public Company or LLP. Even, Public Limited Company can be converted into a Private Limited Company.
NO
ONE PERSON COMPANY (OPC)
Yes, Ministry of Corporate Affairs registers One Person Companies under the
Companies Act, 2013
Firstly, submit a set of names to Registrar of Companies, wait for approval from Registrar. Best practice is that the names submitted must be inoffensive, legal and not
similar to any registered LLP’s
or companies
OPC is a separate legal person in the eyes of law. So, the share holder is not responsible for business liabilities.
Liability is limited to his/her share capital contribution.
1 Person
NA
Profits get taxed at 25% plus cess and surcharge. Is applicable if profit exceeds 1 Cr.
Every financial year OPC
must file Annual Accounts and Annual Return with the Registrar of Companies. Plus, Income Tax must be filed separately
Statutory audit is to be conducted irrespective of business transaction and turnover. Income tax audit is applicable if turnover exceeds 2 Crs.
OPC could be converted into any legal form. But, it depends on the number of promoters, business operations, funding requirements and other factors. Limited Liability Partnership or Private Company is preferred by promoters when seeking
expansion of their OPC
NO
SOLE PROPRIETORSHIP
No legal requirement to do- so.
Promoter can use any name that he likes, but avoiding names already trademarked is advisable.
Promoter will stand liable for the liabilities of the business. Because the business is not considered as a separate legal person/entity
Unlimited liability.
1 Person
NA
Individual income tax slab of the proprietor is the basis of taxation.
Only Income Tax must be filed on the basis on proprietor’s income.
Only income tax audit is applicable if the turnover exceeds limit of 2 Cr.
No
Yes. If turnover exceeds 2 cr
Do I need a Registration?
What type of business names can I keep?
How risky is it for me?
To what extent is each member of the business liable?
Tell me the
minimum membership limit
Is foreign ownership allowed?
How much will I get taxed
What are my annual tax filing norms?
Is Annual Audit Required?
Can I convert my business into any other legal form??
Compulsory Conversion to
Private Limited Company Applicable?
PRIVATE LIMITED
COMPANY
Yes, Ministry of Corporate Affairs registers Private limited company under the
Companies Act, 2013
Firstly, submit a set of names to Registrar of Companies, wait for approval from Registrar. Best practice is that the names submitted must be inoffensive, legal and not similar to any registered LLP’s
or companies
Private Limited Company is a separate legal person in the eyes of law, registered under Companies Act 2013. So, the shareholders are not responsible for business liabilities.
Liability is limited to his/her share capital contribution.
2 People
Yes
Profits get taxed at 25% plus cess and surcharge. Is applicable if profit exceeds 1 Cr
Every financial year Private
Limited Company must file Annual Accounts and Annual Return with the Registrar of Companies. Plus,Income
Tax must be filed separately.
Statutory audit is to be conducted irrespective of business transaction and turnover. Income tax audit is
applicable if turnover exceeds 2 Crs
Yes, Private Limited Company can be converted into a Public Company or LLP.
Even, Public Limited Company can be converted into a Private Limited Company.
NO
LIMITED LIABILITY PARTNERSHIP
Ministry of Corporate Affairs registers an LLP business
under the Limited Liability Partnership Act, 2008.
Firstly, submit a set of names to Registrar of Companies, wait for approval from Registrar. Best practice is that the names submitted must be inoffensive, legal and not similar to any registered LLP’s
or companies
“LLP” is a separate legal person in the eyes of law, registered under LLP Act 2008. So, the partners are not responsible for business’ liabilities.
Liable to the extent of their contribution (in money, in kind or in services extended)
to the LLP.
2 People
Yes
Profits get taxed at 30% plus cess and surcharge. Is applicable if profit exceeds 1 Cr
Every financial year Annual Statement of
Accounts &
Solvency and Annual Return with the Registrar.Plus, Income Tax must be filed separately.
Statutory audit is to be conducted if partners contribution exceeds 25 lakhs or turnover exceeds 40 lakhs. Income tax audit is applicable if turnover exceeds 2 Crs
Yes, Private Limited Company can be converted into a Public Company or LLP. Even, Public Limited Company can be converted into a Private Limited Company.
NO
PARTNERSHIP
Yes. Register with Registration of Firms
Firm can use any name that he likes, but avoiding names already trademarked is advisable
Partners will stand liable for the liabilities of the business
Unlimited liability
2 People
No
Profits get taxed at 30% plus cess and surcharge. Is applicable
if profit exceeds 1 Cr
Only Income Tax must be filed for the income of firm and partners.
Only income tax audit is applicable if the turnover exceeds limit of 2 Cr
es, Partnership can be converted into a Private Limited Company or LLP.
NO
Do I need a Registration?
What type of business names can I keep?
How risky is it for me?
To what extent is each member of the business liable?
Tell me the
minimum membership limit
Is foreign ownership allowed?
How much will I get taxed
What are my annual tax filing norms?
Is Annual Audit Required?
Can I convert my business into any other legal form??
Compulsory Conversion to
Private Limited Company Applicable?
ONE PERSON COMPANY (OPC)
Yes, Ministry of Corporate Affairs registers One Person Companies under the
Companies Act, 2013
Firstly, submit a set of names to Registrar of Companies, wait for approval from Registrar. Best practice is that the names submitted must be inoffensive, legal and not
similar to any registered LLP’s
or companies
OPC is a separate legal person in the eyes of law. So, the share holder is not responsible for business liabilities.
Liability is limited to his/her share capital contribution.
1 Person
NA
Profits get taxed at 25% plus cess and surcharge. Is applicable if profit exceeds 1 Cr.
Every financial year OPC
must file Annual Accounts and Annual Return with the Registrar of Companies. Plus, Income Tax must be filed separately
Statutory audit is to be conducted irrespective of business transaction and turnover. Income tax audit is applicable if turnover exceeds 2 Crs.
OPC could be converted into any legal form. But, it depends on the number of promoters, business operations, funding requirements and other factors. Limited Liability Partnership or Private Company is preferred by promoters when seeking
expansion of their OPC
NO
SOLE PROPRIETORSHIP
No legal requirement to do- so.
Promoter can use any name that he likes, but avoiding names already trademarked is advisable.
Promoter will stand liable for the liabilities of the business. Because the business is not considered as a separate legal person/entity
Unlimited liability.
1 Person
NA
Individual income tax slab of the proprietor is the basis of taxation.
Only Income Tax must be filed on the basis on proprietor’s income.
Only income tax audit is applicable if the turnover exceeds limit of 2 Cr.
No
Yes. If turnover exceeds 2 cr
FAQ
Can a partnership firm be converted to a Company or LLP?
A partnership firm can be converted into a Company or LLP by satisfying the statutory requirements.
Is there any minimum capital requirement?
There is no minimum capital requirement for a partnership firm.
Is it mandatory to have a resident partner?
Yes. A partnership firm should have at least one resident partner.
Can foreign nationals/NRIs become a partner?
Foreign nationals cannot form a partnership firm in India. But NRIs can become partner subject to certain conditions.
Is there any requirement for a Managing Partner?
There is no requirement to appoint a Managing Partner in a Partnership Firm.
What is the minimum and maximum number of Partners?
There should be a minimum of 2 partners to form a partnership firm and the maximum number is limited to 100.