Firm Registration: Best option for Small businesses on sharing of profits between the Partners of the Firm. It is a STARTUP and eligible for benefits under the STARTUP INDIA SCHEME, 2016. Start business today & get...Certificate of Registration, Partnership Deed, Firm PAN, Firm TAN, GST, MSME, Bank A/c Opening Support & GST Software along with your Firm Registration Number.

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Firm Registration in India

Partnership Firm:

A partnership firm is an organization which is formed with two or more persons to run a business with a view to earn profit. Each member of such a group is known as partner and collectively known as partnership firm. These firms are governed by the Indian Partnership Act, 1932. It is a Central Act but administered by State. In a unique feature, all partners have unlimited liability in the business. The partners are all individually and jointly liable for the firm and the payment of all debts. This means that even personal assets of a partner can be liquidated to meet the debts of the firm. It may be for temporary purpose or permanent. A partnership deed can be entered as such. The words LLC, Inc, PJSC, GMBC, PTE LTD, PVT LTD & LTD are not allowed to be used at the end of the firm's name. Certain words are prohibited in the firm name Ex: India, one can refer Prevention of Names and Emblems Act.

Firm registraton is not mandatory, with out registration also, we can apply pan card and run the business. It may be registered with the District Registrar office so as to show their customers that their business is registered.

To register a Partnership firm, there should be two partners. An NRI/Foreign National may become partners of the firm but one of the partners should be Indian local resident.

Who shall register a Partnership Firm: It is preferable for a small business owners where more capital is not required.

Limited Liability Partnership (LLP):

The Limited Liability Partnership (LLP) is one of the business concepts in India, introduced by the Ministry of Corporate Affairs (MCA), Government of India during the year 2008. Unlike a partnership firm, a limited liability partnership have limited liability in which some or all partners will have the limited liability. It exhibits the elements of both partnership and company. In LLP, one partner is not responsible or liable for another partner's negligence or misconduct.

The limited liability partnership is a legal entity and an alternative to corporate business form. It is liable to the extent of it's total assets whereas the partners liability is limited to the extent of their capital contribution. We can say LLP is an hybrid between a company and a partnership. LLP Registration is regulated by The Ministry of Corporate Affairs, Government of India. The governing law for the LLP is Limited Liability Partnership Act, 2008.

Who shall register LLP: Those who are looking for Traditional, Brick & Mortar Businesses.

Why Should I register a Partnership Firm

Below are the main reasons to register a Partnership Firm.

Low Cost of Formation:

The Partnership Firm can be formed with low cost and simple documentation where as a Private Limited Company or Limited Liability Partnerhip incurr lot of cost at the time of incorporation. Digital Signature Certificate is not required to registar a Partnership Firm. The annual compliance cost is much cheaper than that of Private Limited Company or Limited Liability Partnership. A partnership firm is not required to submit or file any documents with the Registrar of Firms an annual basis. It has to file documents with the Registar whenever there is a change in the constitution of the Firm.

Tax Audit & Income Split:

Income Tax Audit is not required for a Partnership Firm if the turnover of the Firm does not exceed Rs. 1 Crore in a financial year and Rs. 2 Crore in case of presumtive income scheme. There is an opportunity for income splitting, an advantage of particular importance due to resultant tax savings. A maximum of 60% of Book Profits can be paid as remuneration to partners of the firm. The remuneration and interest to partners are elibilt to claim as deduction while computing the income from profits and gains from business and profession of the firm, which is subject to limits prescribed under Section 40(b) of the Income Tax Act. The following table illustrates the eligible rementaion payable to partners of the firm:

Calculation of Remuneration payable to partners under Income Tax Act:

You can download it here Click Here or you can view herein below:

Flexibility:

The Partnership Deed can be drafted as per the wishes of the partners of the firm. One partner may have more pwoers than others. One partner may become managing partner who will look after marketing, financial and maintaining the day to day administration and business and the other partner will assist first partner. One partner may be authorised to operate the bank account while the other may act as sleeping partner.

Ownership, Control & Privacy:

Unlike a Company, a Partnership Firm has a conrol over decision making of business transaction and it is vested in the hands of partners of the firm and the financail information of the business can not be accessed by third parties. In a Company, the financials can be easily accessable on MCA web portal.

Sharing of Loss:

The Partnership business is also relatively preferable for small businesses and the profits or losses are shared among the partners of the firm. In case of a Proprietorship business, the loss is to be born wolly by the proprietor concerned and in a Partnership business, it has to be shared by both the partners of the firm according the agreed ratio. Hence, the parners may incurr lessor loss when comparing with a Proprietorship business.

How to Register a Partnership Firm

To register a Partnership Firm, there should be two partners who are majors. NRI or Foreign National may also become one of the partners of the firm. One of the partners should be a local partner. You can find below the Documents required and Step by Step Firm Registration Process.


Documents Required

  • A

    Partners Documents

    1. Partners PAN
    2. Partners ID Proofs
      Aadhaar Card or Voter ID or Passport or Driver's License
    3. Partners Address Proofs:
      Aadhar Card
      Voter Id
      Passport
      Driver's License.
    4. Partners latest passport size photograph
    5. Partners Email ids
    6. Partners Mobile Numbers linked with their Aadhar
    7. Incase of Foreign Partners, International Passport, Inbound immigration stamping and Affidavit is mandatory
  • B

    Office Address Documents

    1. Registered Office Address Proof: Latest Power Bill
    2. No-objection letter from the Landlord.
    3. Rental Agreement from the landlord if the premises are rented.
    4. Firm email id.

3 Step Firm Registration Process:

  • 1

    Drafting of Deed and other Documents

    Through CompaniesHouse- One Hour Job

    We will prepare Partnership Deed, Form-1 and other supporting documents.

  • 2

    Online Submission to Registar Office

    Through District Registrar Web Portal - One Hour Job

    We will upload the documents online with the District Registrar web portal and pay the requisite fee.

  • 3

    Certificate of Registration

    Through online - 3 to 5 Day

    After scrutiny, the District Registrar will approve the form and issues you the Certificate of Registration through online.


What All You Get

  • Certificate of Registration
  • Tax Deduction & Collection Account Number
  • Import Export Code
  • Partnership Deed
  • GST Registration
  • PF Registration
  • Permanent Account Number (PAN)
  • MSME Registration
  • ESI Registration

What Next Once the Firm is Registered

Congratulations!! on registering your new business venture. Most of the enterprenuers do not know what next once the Firm is registered. You can find below the other mandatory registratons and statutory compliance requirements of a Partnership Firm.


Other Registrations

  • A

    GST Registration

    GST registration is Mandatory if you are a Taxable dealer in sale of Goods or supply of Services.

  • B

    IEC Registration

    Import Export Code (IEC) is required to be taken if you deal in Import or Export of Goods of Services.

  • C

    FSSAI Registration

    If your business deals in Food, Catering, Hotel & Restaurant, you need to apply for Food License with Food Safety and Standards Authority of India.

  • D

    IPR Registration

    If you want to protect your business name, brand, literary work, invention, you need to apply for Trade Mark, Copyright, Patent respectively with the department of Intellectural Properties of India.

  • E

    Professional Tax Registration

    Professional Tax is Mandatory for the Companies registered in India. For all states it is not mandatory and infact only for 17 states it is mandatory.

  • F

    Shops & Establishments Registration

    Shops & Establishments registration is mandatory to register with the concerned State Labour Department.

  • G

    MSME Registration

    To avail the benefits under The Ministry of Micro, Small & Medium Enterprenuers Act, it is mandatory to get registered under this Act.

  • H

    Local Trade License

    The new firm has to apply for Local Trade License with the Local Municipality or Municipal Corporation.

  • I

    Mining License

    The company which is into mining business has to take Mining License. This is mandatory requirement for a Mining Company.

  • J

    PF Registration

    If your Company is covered under PF Act, you need to get the PF Registration. Now MCA is giving PF Registration along with Incorporation, you need not required to apply again separately, you need to enrol the employees once the threshold limit crosses.

  • K

    ESI Registration

    If your Company is covered under ESI Act, you need to get the ESI Registration. Now MCA is giving ESI Registration along with Incorporation, you need not required to apply again separately, you need to enrol the employees once the threshold limit crosses.

  • L

    PASARA License

    If your business is into supply of security gaurds, you need to get license under Private Security Agency Regulation Act. This application has to be submitted to the respective State Home Department.

  • M

    ISI Mark

    If your business is into manufacturing of electrical equipments, you need to get ISI Mark.

  • N

    Drug License

    If your business is into manufacturing and dealing in pharmaceuticals, you need to get Drug License from the respective State Drug Controller office.

  • O

    Chitfund Registration

    If your business is into chitfund, you need to take Chit Registrar permission from the respective District Chit Registrar.

  • P

    ISO Certification

    If you want the credibility in the market, you can get ISO Certification.

Partnership Business Compliance


Let's Clear Your Doubts


What is Partnership Business?

Partnership is an agreement between two or more people to share the profits of a business.

Is registration of a Partnership Firm mandatory?

Not mandatory. A partnership business may be run without registration.

Can an NRI or a Foreign national become a partner of a Firm?

Yes.

What is Capital of a Partnership Firm?

The capital is the intial amount of investment by the partners of the firm both in cash or kind.

Is there any minimum capital required to register a Partnership Firm?

Not required.

What is the duration for Firm Registration?

3 to 5 working days.

What is the Government fee for Firm Registration?

The fee varies from State to State in India. Normally, per parter Rs. 100/- is payable to the government.

Can I start Firm from my home address?

Yes, you can start a partnership firm from your home address too.

Can I register my Firm on my own?

Yes, you can but an advoate attestation is required on the application forms. It is advisable to approach a consultant like us before making application for firm registration.

Can a minor become partner of the firm?

No. He or she should be a major.

What are the minimum number of partners required to register a Partnership Firm?

Two.

What are the maximum number of partners required to register a Partnership Firm?

Twenty.

Register your Firm with us for less! Start here & Save! Contact Now!

Get Certificate of Registration, Partnership Deed, Firm PAN, Firm TAN, GST, MSME, Bank A/c Opening Support & GST Software along with your Firm Registration Number!