To start off, what exactly is a Partnership Firm? Moreover, when two or more people decide to co-own a company while also sharing profits and losses it’s a partnership. Furthermore, you can formally register the company as a Partnership firm. Adding on, registration of partnership firm has a lot of benefits. To make things easy for you here’s a simple guide for registration of partnership firm online.
Types Of Eligible Partners
Moreover, there are a set of rules upon who can become a partner at a Partnership firm. Here’s the list:
- Firstly, any individual who’s eligible can become a partner.
- Secondly, a partnership firm cannot be a partner in another partnership firm as an artificial legal person. But, the partners of that very firm can be partners in other firms too.
- A Private/Public Limited company can be a partner at a Partnership firm as these companies are artificial legal persons.
- Lastly, unless the Trustees of that firm are bound by the company bye-laws they can become partners in the firm as well.
Types Of Partnerships
Before you carry out the registration of partnership firm you must know the type of partnerships. Here’s the list you should thoroughly follow:
- Firstly, Partnership at will is a type of partnership that can be dissolved by any partner at any time. Moreover, these partnerships don’t have a binding document or agreement to hold the partnership together. Such partnerships are not formal.
- A Fixed-term partnership has a fixed term for the partnership. Thus when the term ends so does the partnership. Although, the contract can be extended.
- A Particular partnership is struck when the two involved parties want to carry out only a special venture. After which the partnership dissolves automatically. Moreover, it’s like collaborating on a project.
- Lastly, General partnership is the most simple partnership which can be formal or not depending on the partners.
Types Of Partners
- Firstly, Active partners as the name suggest are active partners who take part in the day-to-day activities of the company. These partners sign an agreement to become partners.
- A Sleeping partner is technically an inactive partner. Such a partner has a share in profit and loss but doesn’t participate in running the company. A sleeping partner also has little to no say in the boardroom.
- Furthermore, a Nominal partner only lends his or her name to the firm and has absolutely nothing to do with the running or profits of the company.
- A Partner in profit shares only the profits of the company and isn’t liable for any losses.
- Lastly, a Minor partner also referred to as a Junior partner is not liable to enter into contracts or vote in the firm. But, such a partner can be liable for profit sharing.
- Firstly, a statement in the form for registration of partnership firm (Form-1) with prescribed fees
- Next, a notarized true copy of the partnership deed
- Lastly, proof of ownership/rent/lease of the head office of the firm.
Procedure For Registration Of Partnership Firm
- Firstly, select a name. Furthermore, make sure that the name you choose does not trigger any copyrights or trademarks of others. Also, the name should not consist of words like Crown, Emperor, Empire, etc.
- Next, prepare an agreement. Moreover, there’s a long list of conditions your agreement must follow in order to be accepted. Here’s a simplifies version of that:
- Firstly, it must have the full details of partners such as name address etc.
- Also, the name and address of the firm.
- Type of business conducted by the firm.
- Date of commencing the business
- The duration of the partnership you want to get into.
- Capital Contributed by each of the partners.
- Profit and loss sharing ratio of the partners.
- The management structure of the firm.
- Also, the voting structure of the firm.
- Tax Implications carried out by the firm.
- Dissolution clause as per the bye-laws
- Furthermore, the interest on capital, loan, etc.
- Salaries and commissions of the workforce.
- Retirement, death, and admission clause as per the bye-laws.
- Furthermore, submit an application to the registrar. All you have to do is attach the required documents along with the form for registration of partnership firm (Form-1) and send the application. The procedure for registration of partnership firm is complete from your side.
- If your registration of partnership firm application is accepted, you’ll get a certificate of registration.
Fees For Registration Of Partnership Firm
Fess for registration of partnership firm is INR 1000. There are additional costs like court fees, stamping fees, etc which are minimal. Moreover, the real cost is to hire an expert to do this for you. It can definitely cost a fortune if you don’t know how to negotiate. But, you can take the easier route and find an expert for you at Taxolawgy. All you have to do is make a search on Taxolawgy. From cheap options to the best in the business, we got them all. Make the right bet with Taxolawgy.
Is Registration Of Partnership Firm Mandatory?
In India, registration of partnership firm is not mandatory. But, the state of Maharashtra is an exception where registration is mandatory. Although registration is not required a lot of firms get it done. That’s because a registration empowers the firm to make its own rules for partners apart from some more perks. A company that is not registered as a partnership firm has to follow the guidelines mentioned in the Indian Partnership Act 1932. Moreover, apart from the rules, a registered company has a free hand to sue a third party in case of a conflict. Furthermore, even partners become liable to sue the firm if they want. Thus, registration of partnership firm is a good thing to do.
Legal documentation and filing taxes can be a headache. Furthermore, there are people overcharging everywhere. Same goes for registration of partnership firm. A situation like this can be tiring, exhausting and irritating at the same time. Thus, Taxolawgy makes all of these just a few clicks away. Our entire process is online. The experts take care of everything while you work hard to make your business grow. Furthermore, Taxolawgy is cheap and efficient. Get in touch with us to find out what Taxolawgy has to offer to you.