Some Important Facts to know About the Partnership Firm Registration in India

Partnership Firm is one of the easiest forms of business structure that can be formed with a minimum number of two members. It is the most suitable for the people who want to setup their business with minimal compliances. Partnership firm registration is an agreement between two or more people who agrees to all the terms and conditions of the partnership deed to carry on their business. Swarit advisors help such partnership firms to get their registration under the Indian Partnership Act, 1932 to avoid any kind of legal disputes in future.

In this article, we will discuss some of the crucial facts about the partnership firm registration that is important to know before going for it.

What is the Partnership Firm Registration?

It is not at all mandatory in India to have a partnership firm registration before setting up a partnership business but it is highly advisable to get your partnership firm registered to avail and enjoy all the legal benefits given by government that can’t be availed without getting the registration done. To get your partnership firm registration in India, you need to follow some important steps and collect all the important documents like documents related to the identification of the partners, documents related to the place of the firm, duration of the partnership, sharing ratio, etc.

Some important facts to know about the Partnership Firm Registration

Each and every business structure has its own features. Same is in the case of partnership firm. Here are some of the important facts about partnership firm registration that you must know:

• You just require a minimum number of two members to form a partnership firm in India.
• In a partnership firm all the duties and responsibilities are shared equally among all the members.
• It can be formed easily with minimal legal formalities and very little compliance.
• It is inexpensive to establish and provides you great flexibility in decision making.
• In case you don’t have a partnership firm registration, a partner of the company cannot enforce his rights given under the Indian Partnership Act, 1932. According to it in case of any legal disputes with the third part, the partnership firm cannot claim against them and the third party has all the rights to sue the partnership firm.
• Some of the important rules are needed to follow while selecting a name of the partnership firm prior to its registration that are:

• Name should not be identical to any other firm which is involved in same type of business activities.
• It must not involve words like emperor, empire, crown or any other words that need a prior approval from the government.

• Partnership deed is an important part of partnership firm registration. It is an agreement made between the partners that define their rights, duties, shares, profit sharing ratio and other obligations related to all the partners of the firm. It is always advised to form a partnership deed before starting a partnership firm as it saves you from the future conflicts and disputes amongst the partners. Main components of partnership deed are:

• Nature and type of business activity carried
• Detail regarding the share and capital of the partners
• Profit or loss sharing ratio among the partners
• Full details of the firm and the former partners.
• Rights and duties of all the partners
• Other mutually decided clauses.

• For a partnership firm registration it is important to notarize and duly stamp the partnership deed. Our team of Swarit advisors knows how to draft your partnership deed in very experienced manner.

Conclusion:

Partnership firm registration is a non-complex procedure. It requires some important documentation and a duly stamped partnership deed. It is an only type of business structure that can be formed with a minimum number of two members and requires very few legal formalities. To get your partnership firm registration now or to know more about it drop an email to Swarit advisors at ho@swaritadvisors.com or make a call at their helpline number +919821399320.