Partnership Firm Registration

What is Partnership Firm?

A partnership firm is a business entity that aims to generate profits. It is established when two or more parties agree to jointly own and manage the business, and formalize the agreement through a Partnership Deed. By doing so, the risks and responsibilities of the business are distributed among the partners, lightening the burden on any one individual. Furthermore, the combination of capital and expertise from multiple partners facilitates the achievement of business goals. The Partnership Act of 1932 outlines the framework for running a partnership firm, and provides all the necessary provisions. This Act recognizes both registered and unregistered partnership firms in India. However, unregistered partnerships have certain limitations that may prompt partners to consider registering the firm. Nonetheless, such shortcomings can be addressed by registering the partnership firm at any time after its formation.


Benefits of Partnership Firm

Shared Responsibilities

The term "Partnership" inherently signifies a group of individuals joining forces for a shared business goal. In such an arrangement, the partners collectively bear the responsibility of operating and overseeing the business. To streamline operations, specific responsibilities or tasks may be assigned to one or more partners, as laid out in the Partnership Deed.

Operating Flexibility

A Partnership firm functions according to a Partnership deed that is mutually agreed upon and executed by the partners. This deed enables the partners to determine how the business is to be run, provided that they are in agreement. Furthermore, even after the Partnership deed is registered, it can be modified to suit changing needs. As long as the business operations are in accordance with the signed agreement, there are no restrictions or limitations imposed on the partners.

Pre-defined Object or Period

During the registration of a Partnership firm, the deed outlines the predetermined business objectives and activities, which serve as the primary purpose for commencing operations. The Partnership may be established for a specific duration or for the completion of a particular project or objective. Upon achieving the said goals, the Partnership is automatically dissolved.

Various Financial Returns to the Partners

Partners engaged in a Partnership firm are entitled to multiple forms of returns for their capital investments as well as their individual contributions. In addition to interest on capital and a portion of the profits, working partners may also receive remuneration as agreed upon by the partners. Furthermore, any share of profits received from the Partnership firm is exempt from taxes for the partner who receives it.


Documents required for formation of a Partnership Firm


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PAN Card

A self-attested copy of PAN Card of all partners

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Partners Address Proof

Self- attested copy of Aadhar Card and Voter ID/ Passport/ Driving License of all partners

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Business Address Proof

Utility Bill (Electricity Bill) of the place of business

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Rent Agreement

Rent Agreement and NOC from the owner of the place of business, if rented


Establish Partnership in 3 Easy Steps

1. Answer Quick Questions
  • Pick a Package that best fits your requirements
  • Fill in our questionnaires that take less than 10 minutes
  • Provide basic details & documents required for registration
  • Make payment through secured payment gateways
2. Experts are Here to Help
  • Assigned Relationship Manager.
  • Drafting a Partnership Deed
  • Payment of Stamp Duty on Deed
  • Application for PAN and TAN
3. Establishing a Partnership Firm
  • All it takes is 12 working days*
*Subject to Government processing time

Process to establish Partnership Firm

Day 1
  • Discussion and collection of basic Information
  • Providing Required Documents for Partnership firm registration
Day 2 - 4
  • Drafting a Partnership Deed
  • Review and confirmation from Partners
Day 5 - 7
  • Payment of Stamp Duty on the agreement
  • Partnership Deed Notarisation
  • Application for allotment of PAN and TAN
Day 8 onwards
  • Partnership Deed registration, if subscribed
  • Certificate of Registration from RoF*

The formation and Registration of a Partnership Firm in India

Frequently Asked Questions


Under the Partnership Act, both registered and unregistered partnerships are considered legitimate and are recognized by law. Although registration is not mandatory, it is advantageous due to the potential drawbacks of remaining unregistered. Generally, businesses in their early stages opt for unregistered partnerships until they establish a stable footing. However, unregistered partnerships can be registered at any point after their formation.

The formation of a Partnership Firm does not mandate a specific minimum capital amount. The partners may start with any capital contribution that they deem appropriate. The partners have the freedom to contribute any amount of capital in any form, including tangible assets such as cash or property, as well as intangible assets such as goodwill or intellectual property. Additionally, partners may introduce capital in any proportion, regardless of whether it is uniform or uneven.

If a Partnership Firm remains unregistered, it cannot initiate legal action against any of its partners or third parties. Additionally, a partner cannot file a lawsuit against the Partnership Firm for their claims. However, third parties maintain the right to sue the firm to recover their dues or claims. Despite non-registration, the rights of third parties remain unaffected. The Partnership Firm can be registered at any point after its formation to negate the aforementioned consequences.

The formation of a Partnership Firm with only two partners is feasible by adhering to the stipulated procedures. Moreover, any Partner joining and being appointed to the Firm must be an Indian citizen and resident. Non-Resident Indians (NRIs) and Persons of Indian Origin (PIOs) may only invest in a Partnership Firm with prior government authorization. Additionally, the individual must possess the capacity to contract and not be a minor. A minor may only be included in a Partnership Firm for profits.

It is important to note that only a registered partnership firm is entitled to claim set-offs or other legal proceedings in disputes with third parties. Therefore, it is highly recommended that partnership firms get registered as soon as possible. Moreover, only a registered partnership firm has the right to file a lawsuit in court against the firm or other partners to enforce any contractual or partnership-related rights as provided by the Partnership Act. An unregistered partnership firm can be registered at any time after its formation. .

To register a Partnership Firm in India, one must submit an application to the Registrar of Firms (RoF) with jurisdiction over the firm's Place of Business. This application must be accompanied by the Partnership Deed in the prescribed format. Once the registration procedure is complete, the RoF will issue a Certificate of Registration. The registration process and timeline may vary depending on the RoF.

The Partnership Deed should include specific details about the primary purpose and activities of the firm, as well as major clauses concerning capital contributions, profit-sharing ratios among partners, and management and administration of the Partnership Firm. Additionally, the Partnership Deed should be properly stamped and notarized after it has been signed.

To ensure the legitimacy of the partnership deed, the partners are required to pay the appropriate stamp duty based on the capital of the firm. The stamp duty amount varies depending on the capital contribution made by the partners. Each state has its own prescribed rate of duty under the State Stamp Act.

Every unregistered or registered partnership firm is required to have the Partnership Deed notarized.

The process of applying for PAN and TAN can be initiated after the Partnership Firm Agreement has been executed or after the partnership deed has been registered with the relevant Registrar of Firms. The physical copy of the PAN card will be dispatched by the Income Tax Department to the registered business address.

The registration process for a Partnership Firm in India typically takes around 12 to 14 business days. However, the issuance of the Registration Certificate may vary depending on the regulations of the concerned state. It's important to note that the time required for the registration of a Partnership Firm is subject to the government processing time, which may differ from state to state.

The Partnership Firm is required to maintain the Books of Accounts and Financial Statements. It is also mandatory to file the Income Tax Return for the respective financial year before the due date as per the Income Tax Act.

Partnership firms are not required to prepare audited financial statements annually. However, depending on the turnover and other criteria, it may be necessary to prepare a tax audit statement.

Converting a partnership firm into a private limited company or LLP is possible, but it can be a difficult, costly, and time-consuming process. For this reason, many entrepreneurs may find it more practical to start a company or LLP from the outset rather than starting with a partnership firm.