Meaning Of Partnership Firm:-

A firm which is formed with two or more persons in order to run a business for earning profit is called partnership firm. Member of partnership group is called partner and collectively called partnership firm. The Indian Partnership Act, 1932 governs partnership firm.

Characteristics Of Partnership Firm:-

• On the basis of mutual agreement, Partnership Deed is formed
• Profit and loss is shared between partners
• Liability between partners is unlimited
• Management is clear and collective
• Registration is not mandatory
• Duration is specified

Choosing Of Partnership Firm Name:-

Any name can be chosen by partners as they desire for their partnership firm subject to the rules as follows:-

• The names chosen by partner must be different or not similar to the name of another existing firm doing similar business so as to lead to confusion. If a new firm could adopt an allied name then the reputation or goodwill of a firm may be injured,
• Words like Crown, Emperor, Empress, Empire or words expressing or implying the sanction, approval or patronage of Govt could not be used in name except when the State Govt gives its consent in written form to the use of such words as part of the firm name  [Section 58(3)]

Minimum Requirement For Registration Of Partnership:-

• Minimum 2 Partners are required
• No fixed minimum capital is prescribed

How To Create A Partnership Deed:-

Partnership deed is a document in which the rights and obligations of the members of a partnership is written.

The agreement of partnership deed may be written or oral. But a partnership agreement should be written as oral agreement does not have any value for tax purposes The essential characteristics of a partnership deed are as follows:-

• Name and Address of the firm as well as all the partners
• Nature of business to be carried on
• Date of Commencement of business
• Duration of Partnership (whether for a fixed period/project)
• Capital contribution by each partner
• Profit sharing ratio among the partners

Registration Of The Partnership Firm:-

Although registration is not mandatory yet registration of partnership firm is advisable because

• In case of any dispute, the firm will not be able to have a legal stand against the third party in any case
• A file cannot be registered against the partner in the case of misconduct or disagreement
• Unregistered firm’s liability is less

Documents Necessary for Registration:-

Documents which are necessary for firm are as follows:-

• Application form for registration- Form 1
• Sample of Affidavit
• Partnership deed copy
• Address proof (for the place of business)
• Partners documents- PAN card and Address proof of each individual
• Firm documents- PAN card (specially generated for the firm)
• Supporting Documents- GST registration and Current account details

Procedure for Registration:-

The procedure for registration is as follows:-

• Issue the application form in the beginning
• Fill the form with adequate data and subsequently sign the form by all partners
• Further, form has  to be submitted to the Registrar of Firms of the state where the business is located
• Finally, payment of fee
• Additionally, submit necessary documents

Fees For Partnership Registration:-

Registrar shall intimate any outstanding fees or stamp duty that has to be paid after he is satisfied with the document submitted. The fees for partnership registration may vary from area to area so it is much better to ask the registrar in advance for any such fees that have to be paid.