Partnership Firm Registration

India has a lot of joint firms, which are a key type of business group. To start, you need at least two people. Several people work together to run a business and split the income according to a mutual agreement. Any job, trade, or career can be part of this business.

A law from 1932 called the Indian Partnership Act sets the rules for Indian partnership companies. Partner refers to the people who start the business together. A deal between the partners makes the partnership company possible. It’s called a partnership document, and it spells out how the partners will work together and deal with the business.

What do we understand by Partnership Firm Registration?

It can be defined as the registration of a partnership firm by its associates or partners with the help of the Registrar of Firms. The partners need to register their firm with the Registrar of Firms with respect to the state to which the firm belongs. Partnership firm is not mandatory, so as a result, the partners can apply for registration of the partnership firm at the establishment of the firm or later at any time throughout its operation.

Required Documents for Partnership Firm

Here is a list of the documents that are required while registering as a partnership firm.

• Partnership Deed
• Identity Evidence
• Evidence for Identity of Partners
• Passport-sized Photos
• Address information Proof of partners
• Registration Certificate (if applicable)
• Bank Account Proof
• Specimen Sign of Partners
• Partnership Firm’s PAN Card
• GST Registration (if applicable)
• Power of Attorney
• NOC from the Property Owner
• Affidavit

Advantages of Partnership Firm Registration

Easy formation of the firm

The formation of a partnership firm is easy with respect to registering other forms of business organizations. The partnership firm can be established by drafting the partnership deed and getting into the partnership contract. No other document is required except the partnership deed. It is also not required to register with the Registrar of Firms. The registration is voluntary and does not fall under the category of mandatory.

Less Compliances

As compared with a company or LLP, a partnership firm has to acquire fewer compliances. Things like a digital signature certificate (DSC) and a director identification number (DIN) are not needed in the case of a partnership firm. The partners bring any change to the business easily. They do have legal bounds on their operations.

Quick Decision

As there is no difference between ownership and management, the decision becomes easy and quick. The decisions for the firm are taken by partners together and can be executed straightaway. Partners possess plenty of powers that they can exercise on behalf of the firm. They can even do some business for the partnership company without the other partners’ permission.

Sharing of Profits and Losses

The partners all take an equal share of the company’s gains and losses. In the partnership company, they are even free to choose the profit and loss split. They feel like they own and are responsible for their work because the company’s income and sales depend on it. If the business loses money, they will all share it evenly or according to the partnership deed ratio. This way, no one person or partner will have to bear the full weight of the loss. They are each and each responsible for what the company does.