Partnership Firm

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Partnership Firm

According to Indian Partnership Act, 1932 “Partnership” is the relation between the two or more person who have agreed to share the profits of the business carried on by them all or any of them acting for all.

Person who have agreed to form a business of partnership are individually called as “partners” and therefore the person who are forming a partnership are collectively referred as “firm”. Thus, partnership firm is considered as a business entity created by persons who have agreed to share profits or loss of the business.

A partnership must have at least two partners and utmost twenty partners.

Characteristics of a Partnership firm

Partnership firm comes into existence based on an agreement called Partnership deed.
There must be a business for existence of Partnership firm. Business includes any trade, industry or profession.
Partners share the profits as well as bear the losses equally if any in the course of business.
In partnership firm, there is a partner agent relationship, each partner himself is an agent.
A partnership firm is not a separate legal entity unlike Company under Companies act, 2013. Under this partners are liable for any legal issues or debt incurred by the firm.
Every partner has to participate in activities of firm, and each one’s vote is equal.
A partner can only transfer his share to any other person after taking consent from other partners.
There are two types of Partnership, registered and unregistered partnership. It is not necessary to register partnership firm, but registration may provide certain benefits.
A partnership firm continues till the dissolution of firm by insolvency of partner or incapacity of partner.

Registration Process

Registration of partnership firm is not necessary but it is good for a firm to be registered as it gives the right to sue and being sued.

We can register a Partnership firm easily, just by following the steps which are mentioned below:
a. Firstly, visit Legal Docs Website
b. Secondly, fill the form on this website which provides basic information about proprietor and business to get Partnership Deed
c. Thirdly, print this deed on Stamp paper of specific value and register it with the help of any Advocate/Registrar.

According to Indian Partnership Act, 1932, Section 58 provides the provisions for Partnership Registration.

1. Send a application in Form No. 1 along with all documents and details.

Name of the firm and nature of business of the firm
Place of business of firm
Names of other places where business runs
Joining date of each partner
Full names and addresses of all partners of the firm
Duration of the partnership firm

2. Each partner who have signed the application also verify the same in the manner as suggested under the Act.

3. Some documents must be attached to application as,

Registration Application in Form No. 1
Duly filed affidavit
true certified copy of Partnership Deed
Lease or Rent Agreement or proof of ownership of place where business runs

4. According to section 71 of the Act, the State government has power to make rules related to fees which has been given to the Registrar along with the other documents for registration.

5. Now, a partnership firm has to be named according to the provisions of Act.

6. As per section 59 of the Act, the Registrar makes an entry of the Statement in a register called the register of forms and files the Statement. The date on which the Registrar (is satisfies) records and files the Statement is considered as the date of registration of the Partnership firm.

7. It is necessary for all the firms to apply for registration with the Income Tax Department and obtain a PAN Card.

8. After getting the PAN Card, the partnership firm has to open a current account in the name of the firm.