Procedure for Partnership Firm Registration in India
Partnership firm isn’t defined under the Income Tax Act. However, it has defined the term ‘partnership’ under the umbrella of which it has covered all the firms such as partnership firm, LLP, any association, etc. The main intent behind the assessment of partnership firm is to uncover the hidden profits of the firm which they usually hide. Every partnership firms and their members avail numerous benefit in the corporate sector. As per the Government of India, it’s mandatory for every person who falls under the taxable category to pay tax. Therefore, we advise you to file your returns before the due date to avoid any penalty.
5 Easy Steps for Partnership Firm Registration
- Decide on Business Name.
- Search availability
- Register your Partnership name.
- Create and file Partnership Agreement.
- Register your Partnership.
What is the Partnership Firm Registration?
It isn't in any respect obligatory in India to have a partnership firm registration earlier than setting up a partnership enterprise but it's miles surprisingly really useful to get your partnership firm registered to avail and revel in all the prison blessings given with the aid of authorities which couldn’t be availed without getting the registration completed.
To get your partnership firm registration, you want to follow some essential steps and accumulate all the essential documents like documents related to the identification of the companions, documents related to the region of the firm, duration of the partnership, sharing ratio, etc.
Some important facts to know about the Partnership Firm Registration
Each and every business structure has its own features. Same is in the case of partnership firm. Here are some of the important facts about partnership firm registration that you must know:
· You just require a minimum number of two members to form a partnership firm in India.
· In a partnership firm all the duties and responsibilities are shared equally among all the members.
· It can be formed easily with minimal legal formalities and very little compliance.
· It is inexpensive to establish and provides you great flexibility in decision making.
· In case you don’t have a partnership firm registration, a partner of the company cannot enforce his rights given under the Indian Partnership Act, 1932. According to it in case of any legal disputes with the third part, the partnership firm cannot claim against them and the third party has all the rights to sue the partnership firm.
· Some of the important rules are needed to follow while selecting a name of the partnership firm prior to its registration that are:
- Name should not be identical to any other firm which is involved in same type of business activities.
- It must not involve words like emperor, empire, crown or any other words that need a prior approval from the government.
·Partnership deed is an important part of partnership firm registration. It is an agreement made between the partners that define their rights, duties, shares, profit sharing ratio and other obligations related to all the partners of the firm. It is always advised to form a partnership deed before starting a partnership firm as it saves you from the future conflicts and disputes among the partners. Main components of partnership deed are:
- Nature and type of business activity carried
- Detail regarding the share and capital of the partners
- Profit or loss sharing ratio among the partners
- Full details of the firm and the former partners.
- Rights and duties of all the partners
- Other mutually decided clauses.
For a partnership firm registration it is important to notarize and duly stamp the partnership deed. Our team of Swarit advisors knows how to draft your partnership deed in very experienced manner.
Partnership firm registration is a non-complex procedure. It requires some important documentation and a duly stamped partnership deed. It is an only type of business structure that can be formed with a minimum number of two members and requires very few legal formalities.