Partnership for the Modern Entrepreneur.
A General Partnership is a business structure in which two or more individuals manage and operate a business in accordance with the terms and objectives set out in the Partnership Deed. This structure is thought to have lost its relevance since the introduction of the Limited Liability Partnership (LLP) because its partners have unlimited liability, which means they are personally liable for the debts of the business. However, low costs, ease of setting up and minimal compliance requirement make it a sensible option for some, such as home businesses that are unlikely to take on any debt. Registration is optional for General Partnerships.
Basic Requirements to Start a Partnership Firm
Minimum Two Person
A minimum of two partners is required to start a Partnership Firm. The maximum number of partners allowed for a partnership firm in India is twenty partners. However, no foreigner is allowed as partners in the partnership firm.
There is no minimum or maximum capital prescribed under the Partnership Act 1932. You can keep the capital of the firm as per the business requirements. The stamp duty on the deed depends on the capital and the state.
You should select the name of the partnership firm that is unique & which reflects the main business activity. Ensure that the proposed name is not the same or similar to any existing business or trademark registered or applied.
Address at which the firm carries on its usual business or maintains its books of account is known as its Principal Place of Business. The latest proof of the place of business along with a NOC from the premises owner is required.
Arrange List of Documents For Firm Setup
The process starts with documentation of the partners and the Principal Place of Business, where the firm shall be operating its business in India. Ensure that the documents are updated and correct. We shall also require information in the Questionnaire For Partnership Formation.
Consideration of Name of the Firm
While keeping the Partnership Firm’s name, you should thoroughly check the name of existing business or trademarks. To check the name of an existing company or LLP, you may visit mca.gov.in, and for checking the trademark, the database visits mca.gov.in the Registrar of Trademarks’ website
Drafting of Partnership Deed
The Partnership Agreement or the Deed is the constitution of the firm and is the primary document. The Deed of the Partnership must contain necessary covenants that determine the partners’ mutual rights and obligations among themselves. This document also specifies the capital and profit-sharing ratio and how the partners shall operate the firm. Our team of lawyers help startups
Stamp Duty & Notary of Partnership Deed
After the draft partnership agreement is approved and adopted by the partner’s appropriate stamp duty, on the partnership deed has to be paid. The stamp duty/paper varies from state to state and depends on the firm’s capital. Finally, the partners signed the partnership deed in the presence of two witnesses
PAN Card and TAN of the Firm
The application for allotment of Pan Number and Issue of the Partnership Firm’s Pan Card is made in Form No 49A. The TDS Number (TAN) of the firm is applied in Form No 49B, which is necessary to comply with the TDS Provisions
GST Registration of Partnership Firm
The GST is a tax on supply of goods or services and to comply with the GST Law provisions, the firm may need to get registered with the GST. Please refer to our dedicated webpage on GST Registration to know the threshold limit as may be applicable for seeking the GST Registration
List of Documents Required For Partnership Firm Registration
Frequently Ask Questions
The documents requirements are as follows : For Partners Pan Card for Indian Nationals. ID proof- Any one (Voter ID/Aadhar Card/Driving License/Passport) Address Proof- Any one (Electricity Bill/Telephone Bill/Mobile Bill/Bank Statement) In addition, the landlord of the registered office premises must provide a No Objection Certificate (NOC) for having the registered office in his premises and must submit his identity proof and address proof.