Online Partnership Firm Registration in India - Fee, Form & Process (2020) | Onfiling
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Partnership Firm Registration

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Overview

What is a Partnership Firm? 

Being a popular sort of business constitution Partnership Firm is a business form that is owned, managed, and controlled by an Association of individuals for profit. Partnership firms are relatively easy to start out and prevalent amongst small and medium-sized businesses.
 
Partnership firms can be categorized in two ways, registered and un-registered Partnership firms. There is no compulsion to register a Partnership firm; however, it’s advisable to register a Partnership firm due to the added advantages of the right to file a case against third parties, the power to claim set-off against the third parties claim and it is an easy and fast process to convert into any other business form if the partnership is registered. 

What is a Partnership Deed?

Partnership firms are created by drafting a Partnership deed amongst the Partners. Partnership Deed is an agreement between the partners of a firm in which the terms and conditions of partnership among the partners are framed. ONFILING can help to start a registered or un-registered Partnership firm in India.

What is the difference between Traditional Partnership Firm and LLP?

Traditional partnership firm: Every partner is liable, jointly with all other partners and also severally for all acts of the firm done while he’s a partner.
LLP: Liability of the partner is restricted to his agreed contribution. All partners aren’t liable on account of the independent or unauthorized acts of other partners, thus allowing individual partners to be shielded from joint liability created by another partner’s wrongful acts or misconduct.

The salient features of Partnership Firm form of organization are as under:

Minimum Two Person

Two person are required to become partners of the firm. Maximum 20 partners are allowed in a firm and 10 in banking business.

No FDI is allowed

In a partnership firm foreign investment is not permissible. In the firm, only Indian citizen can become the partner and can begin the partnership firm.

No Minimum Capital

No minimum capital is prescribed, it must be according to the business requirements. The Stamp Duty on the deed is predicated on the capital of the firm.

Unique Name

Name of the firm should be unique, and it should not be same or similar to the name of any existing trademark which is registered or applied.

Advantages

  • Easy Formation and Closer
  • Balanced decision Making
  • More funds availability due to multiple partners
  • Sharing of Risk
  • Benefits of Specialization

Disadvantages

  • Unlimited Liability
  • Lack of Transparency
  • Possibility of Conflicts if partnership deed is not well drafted
SELECTION OF NAME

The first step is to select the name of the partnership firm which should be unique to avoid any infringement of somebody else Trademark or registered name.

DEED DRAFTING

The second step is to draft the Deed of Partnership which is known as the constitution of the firm which determines the relationship of partners among themselves as well as the relation of partners with the firm.

DEED NOTARY

The third step is to get the Partnership Deed signed and notarised.

FIRM REGISTRATION

The signed partnership agreement including the KYC of partners and premises proof is filed with the concerned Registrar of Firms, for its registration.

COMMON REGISTRATION OR LICENSES FOR PARTNERSHIP

Shops & Establishment Registration

Every shop and the commercial establishment are required to obtain establishment registration with the Labour Department within 30 days of starting their business. It is mandatory for all states in India.

Trade License

No one should be adversely affected by health hazard and nuisance by the improper carrying of trade a License is necessary from the municipality within 30 days of starting the business.

Professional Tax Registration

Specific legislation have been passed by majority state governments to impose a tax on profession, employment of calling of any nature, however, and the fees for it is Rs. 2500 per annum.

Goods and Services Tax (GST)

GST Registration is mandatory for each business engaged in providing services or supply of products, where the turnover exceeds Rs. 40 Lac or does even one transaction in an interstate trade.

Food License / FSSAI Registration

During a business of producing, trading, storing or dealing in any manner of food items, then the state level FSSAI registration or Central License is mandatory based on the turnover.

Drug License

This location-based Drug License is granted by the State Government based on fulfilling certain norms and criteria. No entity can start or continue the sale/trade of medicine without a drug license.

Private Security Agency License

Private Security Agency may be a lucrative business with immense potential; however, it can be started or continued only after obtaining a license from the competent authority as designated by the state government.

Import Export Code (IEC)

IEC is a ten-digit pan based registration with the DGFT. IEC is a mandatory prerequisite to start a business of Import or Export in India. Only one IEC code can be issued against a pan.

FAQS

Yes, a partnership firm can be converted easily into a Limited Liability Partnership or a Private Limited Company. The partnership is an old method of doing business; we always recommend to start a business in the Private Limited form.

Partners must be major (above the age of 18), should be sane and should not be disqualified by law from entering into a contract.

Capital is the initial amount in cash or kind contributed by the partners to start the business. It is not necessary for each partner to contribute equally to the capital. Contribution is based on the agreement between the parties.

To start a partnership firm, the minimum number of partners is two, whereas the maximum number of partners can be 20. The partners must come together to carry on any legal business with the motive of earning profits.

The Partnership Act does not prohibit a non-citizen from joining an Indian partnership firm, subject to necessary clearances and permissions from satisfactory authorities in this regard.

It is not compulsory for a partnership deed to be in writing. Partnerships can also be oral.

The stamp duty on the partnership deed varies from state to state, and within one state it further varies based on the capital of the firm. You must correctly consider the applicable stamp duty on the partnership deed. The notary of the deed is an essential requirement for partnership registration

The partnership business is regulated under Indian Partnership Act, 1932, which prescribes possibility of two types of the firm, unregistered firm, and registered firm. An unregistered firm is formed by entering into an agreement between two competent persons, known as partners, where the firm is not registered with the registrar of firms. Whereas the firms which subsequently get registered with the registrar of firms by submitting the copy of partnership deed and KYC of partners and the registered office is known as the Registered Partnership Firm.

A registered Partnership firm have the advantages of the right to file a case against third parties, the power to claim set-off against the third parties claim and it is an easy and fast process to convert into any other business form if the partnership is registered. Whereas all these benefits are not available to unregistered partnership firm except in criminal proceedings.

Three elements are necessary to form a partnership: 1. There must be an agreement between two or more persons. 2. The agreement must be to share the profits of the business. 3. All partners together, or any one, on behalf of the others must carry on the business.
Plan Start Rs. 5800 Only

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List of Documents

  • Proof of Registered Office not older than 2 months ( (Electricity, Telephone Bill, Rent Agreement))
  • PAN Card and Aadhaar card Copy of Partners
  • Address Proof of Partners (Bank Statement / Electricity, Mobile, Telephone Bill)
  • NOC from the owner of the premises
  • Scanned Photograph of Each Partners
  • Identity Proof of partners (Voter ID / Driving License/ Passport)

Pricing Plan

BASIC ₹5800
One Time

  • Partnership Deed Drafting
  • Partnership Deed Notarization
  • PAN Card & TAN Number
  • GST Registration
  • Business Current Account Opening
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Get Plan

SILVER ₹4000
Quarterly

  • INCLUSIVE OF BASIC PACKAGE
  • 12 Months GST Return Filing (GSTR-1 and 3B)
  • GST E-way bill software
  • TDS Compliance for 12 months
  • Income Tax Return Filing
  • MSME Registration
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Get Plan

GOLD ₹10000
Quarterly

  • INCLUSIVE OF SILVER PACKAGE
  • TDS Return for 12 Month
  • Book Keeping and Accounting upto 800 entries
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Get Plan

PLATINUM ₹15000
Quarterly

  • INCLUSIVE OF GOLD PACKAGE
  • Book Keeping & Accounting upto 2000 entries
  • Payroll outsourcing upto 50 employees
  • -
  • -
  • -
  • -
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Get Plan

Disclaimer : 1) These packages are applicable where turnover is below Rs. 50 lakh in case of profession and Rs. 1 crore in case of business. 2) Stamp paper purchase support. Stamp duty charges payable by client on actual. 3) Business Current Account powered by ICICI Bank Limited. Subject to terms and conditions of ICICI Bank Limited. 4) Charges applicable extra for Partnership Firm registration with Registrar of Firms of the respective states.This is an optional process after partnership firm documentation.

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