How to register a Partnership firm in India?
When two or more parties establish a legal agreement to manage and operate a business and share both profits and losses, partnership firm registration is necessary. Small businesses might consider forming a partnership since the process is simple and there are few legal requirements. Partnerships have been legal in India since 1932, making them one of the country’s oldest forms of commercial organisations. Even after it has been created, a partnership business can be registered. There are currently no consequences for failing to register a partnership business. Unregistered Partnership businesses, on the other hand, are denied certain privileges under Section 69 of the Partnership Act.
What documents are required to register a Partnership Firm in India?
The identity evidence, address proof, a true copy of the Partnership deed entered into, and proof of the principal place of business must all be included in the Partnership registration form application.
As evidence of identity and address, any of the following papers can be used.
- PAN (Personal Identification Number) card
- Driver’s licence
- Aadhar Card is a government-issued identification card.
- Voter’s ID
The following papers can be used to demonstrate proof of business premise:
- If the Partner owns the property, a Sale Deed is required.
- If the office is rented, a copy of the rental agreement is required.
- a copy of the most recent power bill or a copy of the tax bill receipt
In India, how do you register a partnership firm?
In fewer than seven days, SRCC can help you form a partnership business.
1)First, an SRCC adviser will give you an overview of the procedure and present you with a list of essential documents for registration.
2)Documents can be submitted digitally using our mobile application or our website.
3)After the papers have been verified, a Partnership Deed is created and delivered to the partners for signatures.
4)It is important to note that all partners must sign the papers on stamp paper and submit a copy to our systems.
5)Once the signed Partnership Deed is ready, it is registered with the appropriate Registrar of Firms, and the Partner is given a Certificate of Registration.
6)Along with delivering the Partnership firm’s Certificate of Registration, we can also assist you with opening a current bank account in the Partnership firm’s name.
Types of Partnership Firm
We can divide partners into different groups based on the amount of their obligation when forming a partnership business.
Registered and unregistered Partnership businesses are the two categories of Partnership firms. According to the Indian Partnership Act, the sole criteria for starting a business as a Partnership firm is the completion and execution of the partnership deed between the partners.
Partnership businesses are not required to be registered under this statute. As a result, a large number of partnership firms operate as unregistered partnership firms.
There are no fines for partnership businesses that do not register. A partnership business can also be registered after it has been formed. Unregistered partnership businesses, on the other hand, have been denied certain privileges under Section 69 of the Partnership Act, which deals primarily with the consequences of non-registration.
The following are some of the reasons why a person should choose a registered partnership firm:
A registered firm partner cannot sue the firm or other partners in any court to pursue any claim deriving from a contract or a right given by the Partnership Act.
A firm cannot file an action in any court to enforce a claim deriving from an agreement against a third party unless the firm is registered under the Partnership Act.
In a dispute with a third party, an unregistered business or any of its partners cannot seek set-off or other remedies.
As a result, it is preferable to form a partnership as soon as possible.
What are the benefits of registering a partnership firm?
The benefits of forming a partnership company outweigh the cons. The benefits of forming a partnership business have been discussed previously.
It is simple to begin.
Partnership businesses are easier to form, and in most situations, all that is required is a Partnership deed.
Sense of ownership
As each partner is the sole owner, the partners have complete control over the firm’s operations. Although the duties may differ, everyone in a Partnership company is working for a similar goal.
Ownership fosters a sense of responsibility and belonging, which aids in the development of a dedicated staff.
Raising of Funds
In comparison to a proprietorship, a partnership can swiftly raise cash.
In compared to a proprietorship business, banks perceive Partnerships to be more advantageous when approving credit facilities.
Decision-making in a Partnership company is speedier since there is no idea of approving a resolution.
In India, partners in partnership businesses have a wide variety of powers, since they can do any business with the agreement of the other partners.
How do you turn a partnership into a limited liability partnership (LLP)?
When compared to the newly established Limited Liability Partnerships, registering Partnership businesses has several disadvantages due to the fact that Partnership businesses do not give Limited Liability Protection to their partners.
LLPs have recently been a popular alternative for small and medium-sized businesses.
Let’s have a look at how to turn a partnership into an LLP.
To begin the process of converting a partnership into an LLP, each partner must first get a Digital Signature Certificate and a DPIN OR Director Identification Number (DIN).
Along with Form 17, the following papers are required:
1)Consent of Partners for conversion into an LLP
2)Incorporation Documents for LLP
3)NOC from Tax Authorities
4)Financial Statements of the Partnership firm
5)List of all creditors along with their consent
6)Any other document or information as requested by the authorities.
The LLP must then use the required procedures to notify the relevant Registrar of Firms that it has converted a Partnership into an LLP within 15 days of the conversion date.
What is the procedure for transferring the registration and licence?
Licenses, approvals, permissions, and registrations will not be moved immediately into an LLP. Consider if any properties were registered under the Partnership company prior to the conversion. In that scenario, the LLP must contact the appropriate authorities and begin the asset transfer process as prescribed.
As a result, the Partner must explain all issues before changing a Partnership business into an LLP.
The Partnership is dissolved after the conversion to an LLP, and the name of the Partnership firm is deleted from the Registrar of Firms’ record. The partnership firm is deemed fully converted to an LLP, and all existing contracts, employments, agreements, and so on are unaffected by the conversion.
For any transactions undertaken after the conversion of the Partnership into an LLP, the Partners will now have Limited Liability Protection. Prior to conversion, the Partners will continue to be individually responsible for any business conducted as a Partnership.
After converting to an LLP, the newly established LLP must include a statement in all official communication for at least 12 months from the date of conversion that it has changed from a partnership to an LLP.
Visit the SRCC website to convert a partnership firm into an LLP.
Thousands of entrepreneurs have used SRCC to assist them pick the right form of company entity. Our services have aided entrepreneurs in expanding their enterprises at a low cost.
We want to assist the entrepreneur with legal and regulatory obligations, as well as lead them through the business life cycle, providing assistance and direction along the way.
Our business advisors will assist you in selecting the appropriate company type and guiding you through the post-incorporation compliance process.