Partnership firm
Partnership Firm
Partnership firm is a business structure in which two or more persons agree to share profits or losses arising from a business jointly operated by them. It is widely used structure in India as it has been in existence since ages, it is easy and quick to start and requires very low cost for setup and maintenance.
Unlike in case of a company, Partnership firm does not have its own separate legal identity. Rather, every partner is like an agent of the firm as well as of the other partners. Partnership firms are created by drafting a ‘Partnership deed’ amongst the Partners. All the dealings between partners as well as the dealings between Partnership firm and third parties are in accordance with the terms set out in Partnership Deed.
A Partnership Firm gets its legal validity from the Indian Partnership Act, 1932. It is not compulsory for every partnership firm to be registered under the Act. Accordingly, there are two types of partnership firms – (1) Registered Partnership Firm (2) Unregistered Partnership Firm.
There are no fines, penalty, etc for starting and operating a business under a partnership firm which is not registered. However, as per section 69 of the Partnership Act, 1932, an unregistered firm is not eligible for the following benefits available to a registered firm:
- A partner of an unregistered firm cannot file a suit in any court against the firm or other partners for the enforcement of any right arising from a contract or right conferred by the Partnership Act.
- No suit to enforce a right arising from an agreement can be instituted in any Court by or on behalf of a firm against any third party unless the firm is registered.
- An unregistered firm or any of its partners cannot claim set-off or other proceedings in a dispute with a third party.
It is, therefore, recommended to register a Partnership Firm.
A partnership firm can be registered at any time after formation and it is not necessary that the firm should be registered before or at the time of starting business.
Tax Vyapar will help you in drafting a Partnership Deed, registration of Partnership Firm and other related formalities.
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Our Pricing
Basic
Unregistered partnership firm-
Unregistered Partnership Deed
-
Stamp duty on Fixed Capital *
-
PAN & TAN
-
Udyog Aadhar (Udyam Registration)
Standard
Registered partnership firm-
Registered Partnership Deed
-
Stamp duty on Fixed Capital *
-
PAN & TAN
-
Udyog Aadhar (Udyam Registration)
-
ROF Fees
-
Notary
-
Marathi Conversion of English Deed
Premium
Registeration with GST-
Registered Partnership Deed
-
Stamp duty on Fixed Capital *
-
PAN & TAN
-
Udyog Aadhar (Udyam Registration)
-
ROF Fees
-
Notary
-
Marathi Conversion of English Deed
-
GST
-
IEC Code
*Being Rs.500/- for Fixed Capital upto Rs.50,000/-. Thereafter, Rs. 500/- additional duty for every Rs. 50,000/- of additional Fixed Capital, subject to maximum duty of Rs. 15,000/-.
Features & Advantages
Easy Setup
It is very easy to form a partnership firm since it comes into existence merely by executing a Partnership Deed. Registration is not mandatory.
Joint Liability
All the partners are jointly and severally liable towards the debt of firm.
Tax planning
Since a partner is allowed to get interest on capital, salary, bonus, commission as well as remuneration from firm, there is scope for Tax Planning.
Unlimited Liability
All the partners have unlimited liability towards outstanding debts of firm and thus their personal assets can be attached & liquidated for discharging debt.
Less Compliance
Firstly, Registration is not compulsory. Even otherwise, there is hardly any compliance as compared to Companies & LLP.
Relatively High Capital
Larger financial & managerial resources are at the disposal of firm, as compare to Sole proprietorship.
Comparison
Compare different types of business structures available to determine which suits you the best
- Number of Person
- Governing Act
- Registration requirement
- Liability
- Separate Legal entity
- Perpetual Existence
- Statutory Compliances*
- Statutory Audit*
- Tax Rates
- Tax on profits/ dividend distributed
- Recommended For
* Extent of Tax compliances and requirement for Tax Audit is same for all business structures, the above details pertain to compliance and audit requirement under their respective statues.
** Applicable when turnover exceeds INR 40 Lakh or contribution exceeds INR 25 Lakh
Registration of Partnership Firm in Maharashtra
1
Fill Form A
Fill online application form ‘Form A’ on Registrar of Firms (ROF) website
2
Upload Documents
Attach relevant documents (mentioned below)
3
Submit Form
Submit the application form
4
Pay Fees
Make online payment of registration fees
5
Notarise Form
Take Print out of the application form and get it notarised
6
Acknowledgement
Submit the hard copy of form with ROF alongwith all other documents & get acknowledgement
7
Objection Notice
If any objection notice is received, submit additional documents
8
Firm Registered
Once Approved, Certificate of Registration is issued by ROF
Time Frame
Drafting Partnership Deed
To obtain PAN & TAN
15 days - without digital signature
GST Registration after getting PAN
Filing Application with Registrar of Firms (ROF)
Certificate of Registration
Time taken for Receipt after making application
Information Required for Drafting Partnership Deed
- Name of Proposed Firm
- Main Object of Firm
- Office Address
- Capital Contribution
- Date of Starting business
Specific Information
Apart from above, it is recommended to include specific clauses with respect to following subjects in the Partnership Deed, to avoid any conflict at a later stage:
- Interest on capital invested, drawings by partners or any loans provided by partners to firm
- Salaries, commissions or any other amount to be payable to partners
- Rights of each partner, including additional rights to be enjoyed by the active partners
- Duties and obligations of all partners
- Adjustments or processes to be followed on account of retirement or death of a partner or dissolution of firm
- Other clauses as partners may decide by mutual discussion
Documents Required
These documents are required for drafting and executing Partnership Deed
Relating to PARTNERS
- Photograph
- PAN Card
- ID Proof of all partners (Passport / Voters ID/ Aadhar Card)
* Name and other details on address proof should match PAN card details
Relating to PLACE OF BUSINESS
If Rented:
- Rent Agreement
- Any one utility bill (electricity bill / property tax bill)
- NOC from landlord
If Owned:
- Purchase Deed
- Any one utility bill (electricity bill / property tax bill)
For Registration of Partnership Firm, in addition to above, the following documents are required:
- Authority Letter signed by all partners (required if application for partnership firm registration is done by CA or Advocate)
- Certified true copy of Partnership Deed (Certified by CA or Advocate)
- Certified true copy of Marathi Translation of partnership deed (Certified by CA or Advocate)
- Covering Letter with Rs.5 Court fee Stamp
- Blank Stamp Paper of ₹ 10/- or more in the name of partner or firm
- Registration fees of Rs.1600/- in favour of Registrar of firm, Mumbai
Deliverables
What will you get at the end of the process for Partnership Formation / Registration !
- Partnership Deed on Stamp Paper
- Payment Receipt & Acknowledgement for submission of Form A
- PAN
- TAN
- Udhyog Aadhar (Udyam Registration)
- Firm Registration Certificate After 5-7 Months (If Opted)
- GST Registration (If Opted)
Kick start your Partnership Firm 🚀
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