A Partnership Firm registration is governed by ‘The Partnership Act 1932’ and involves two or more Individuals who enter into an agreement called “partnership deed” to carry on a specified business. Unregistered Partnerships involve no separate registration and can be formed easily with lesser legal compliances compared to other corporate entities. Although registration of a partnership firm is optional, the partners may opt for the registration which provides a legal edge over the unregistered partnership.
A partnership firm is registered state-wise under the Registrar of Firms and Societies. The partnership deed is the most crucial document which governs the partnership. In an unlimited partnership firm, every partner is liable jointly with all the other partners for all acts of the firm. Alternatively, one can also opt for LLP which reduces the liabilities of the partners.
A partnership firm registration can be easily initiated by the partners by entering into a Partnership Deed which is a well-drafted agreement and defines the responsibilities and liabilities of all the partners.
A partnership firm is not compulsorily required to be registered under any law. Hence, there are lesser compliances which are required to be complied with during the normal course of business.
Each partner is personally liable for the losses of a partnership firm, which is a concern in partnerships since every partner is liable for the acts of the other partner.
A Partnership is formed through an agreement among the partners. A written agreement serves as a primary record of the terms and conditions of a partnership.
Which type of partnership is required, Registered or Unregistered Partnership?
A deed is drafted post discussion on risk and responsibilities
Each partner should sign and approve the Partnership deed.
Partners may get the partnership registered
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No, the registration of partnership firm is optional, but for legal prospects, a partnership agreement or Partnership deed is required to be executed between the partners describing the terms of the partnership.
Minimum of 2 individual Partners are required to start a partnership firm.
Yes, every partner is jointly liable with all the other partners and also severally liable for all acts of the firm done during the tenure of his partnership.
Indian Partnership Act, 1932 has put no limitations on maximum numbers of partners in a firm
Only an individual can be a partner in a firm.
Partnership firm gets dissolved as per the terms of the Partnership agreement or Partnership deed if executed or as decided between the partners at the time of formation.
In order to form a partnership firm, a written partnership deed is not compulsory, but it is better to draft the document. It is prudent to have a partnership deed for dealing with banks, income tax authorities, and clients. Also, a written partnership deed will help as a reference in case of any disputes or issues among the partners.
In partnership, there is no restriction on the citizenship of the partner. Any non-Indian citizen can be a part of the Indian partnership firm subject to certain approvals.
In India, under the Indian Partnership Act, 1932, a minor cannot become a partner but can be admitted to the benefits of the partnership firm. However, with the consent of other partners, he can share profits of the firm and also have access to the books of accounts of the firm.
No, identity protection is not available upon partnership firm registration.
Yes, the partnership firm can be registered in anyone’s name as far as required documents are available and the concerned person has no objection in being the partner.
Yes, once the partnership deed is notarised, partnership firms can apply for a separate PAN card. It is necessary that one partner is a managing partner responsible for signing on behalf of the firm.
The partnership deed can be notarized by a lawyer in presence of all the partners.