Incorporation of Partnership Firm
Incorporation of Partnership Firm, The Partnership firms are the most famous business entities in India which are governed by the Partnership Act, 1932. The Section 4 of the Partnership Act 1932 defines Partnership as – “An agreement between persons who have agreed to share profits of the business carried on by all or any one of them acting for all.”
The Registration of a firm under the Partnership Act is not mandatory as in the case of setting up a company. Although it is always advisable to get your firm registered at Registrar of Firms/Department of Industries of the Town/City where you are planning to set up the business. This remedy ensures that you to get a legal proof of the firm’s existence. Apart from this, the Partnership Act provides several benefits and rights to every partner to file a legal suit in case of partnership disputes, settling the claims against third/external parties, etc.
In case of any disputes, a court of law would first check the constitution of the firm to check terms and conditions under which the partnership was formed. Registration of Partnership Deed provides the same.
Incorporation of Partnership Firm
The process of Incorporation of Partnership Firm
The first step for registration is to arrange the documents required for Incorporation of Partnership Firm. You need the below-mentioned documents for Incorporation of Partnership Firm –
a. Address Proof of your firm, e.g. – current account details or any other licence applied in the name of your firm.
b. Identity proof of partners – Aadhar Card, PAN Card, Voters’ ID card, Passport etc.
c. Address proof of partners – Aadhar Card, electricity bills, ration.
d. Attested Partnership Deed
e. Stamp Duty of appropriate value (Through Stamp papers){1}
f. Photographs of all partners.
g. Completely filled application form.
There is no specific application portal for registering your firm in India. Each and every state follows its own registration process, in some states application can be filed online and for other states, the application needs to be filled manually. For the manual applications, the application process time can get extended up to 1 month.
the most important document in the above-mentioned documents is a Partnership Deed. This deed, notarized on a Non-Judicial Stamp paper with a minimum value of Rs. 200 or more and to be signed by all partners, is the “Constitution of Firm” or charter or blueprint of the firm. although there is no specified format of a Partnership Deed has been declared by the government, however, it must be cover the wide range of important topics addressing the “Name of your firm, its Partners, their Profit-sharing ratios, Capital contributions, Salaries to be drawn, Location of the firm, Policies to be followed while choosing vendors, Objects or scope of operation of the firm, Dispute resolution mechanisms, etc. here is an example of a draft partnership deed,
the further step is to submit the application with Registrar of Firms/Department of Industries offices along with the nominal fees. On completion of the procedure, the Registrar of Firms will enter the name of the firm in its books and issue Certificate of Registration. This certificate will be used as legal proof of the existence of your firm. one more legal requirement is to get a separate PAN card from Income Tax Department in the name the name of the firm (as mentioned in your Certificate of Registration). You have to apply for a PAN irrespective of whether your Partnership firm is registered or not.
Incorporation of Partnership Firm
Fees
There are no statutory/ legal fees required to be paid for registering of partnership, except the professional fees and stamp duties:
1.the affidavit from each partner on a stamp paper of Rs. 10 each stating their consent and willingness to enter into this agreement.
2. Court Fees Stamp of Rs. 3 for the application form
3. Registration and documentation charges need to be paid to get the document registered with sub-registrar (about Rs. 1100). States follows the different slabs for these charges.
Note: Stamp Duty may vary from State to State, an indicative list is appended herewith.
Incorporation of Partnership Firm
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