Partnership Firms

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What’s Included?

  • Registration in 7-10 Business DaysExcluding Government Approval time
  • Company PAN and TAN
  • Company Name Approval
  • MOA & AOA
  • Incorporation Certificate
  • DSC Tokens
  • DSC Support & Shipping
  • Digital Signature Certificate
  • Director’s Identification Number (DIN)

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*Excluding Government Approval time

Partnership Firm Registration in India

A partnership is a type of business structure in which two or more individuals or entities collaborate in terms of resources, skills, and capital to operate a business together. Indian Partnership Act 1932 is the governing law that regulates partnership firms in India. It is a popular choice for small businesses, professional practices (e.g., law firms, medical practices), and service-based businesses due to its flexibility and relatively simple formation process.

⚠️ Important Compliance Note:Please note that Partnerships do not have an official registration with the Ministry of Corporate Affairs (MCA). As a result, Founding Legals does not provide direct online automated registration services for Partnerships. Our automated portal offerings are limited to Private Limited Companies, Limited Liability Partnerships (LLPs), and One Person Companies (OPCs). However, our compliance team is happy to manually assist you with drafting deeds and obtaining local registrations.

Documents Required to Register a Partnership Firm

1. Identity Proof and Address Proof of Partners

  • Passport / Aadhar card / Voter ID / Driver's License of Partners
  • PAN card (Mandatory)
  • Utility bills or Bank Statements as address proof

2. Proof of Registered Office

  • Ownership of Property: You can provide proof of ownership, such as an electricity bill or corporation tax receipt dated no more than 30 days old.
  • Right to Use the Property: You can demonstrate your right to use the property by presenting a rental agreement or a No Objection Certificate (NOC) from the property owner.

3. Partnership Deed

A partnership deed is a crucial agreement that outlines the rights, responsibilities, profit-sharing, and other obligations of the partners. While it can be recorded verbally, it is highly advisable to formalize a written partnership deed with the Registrar of Firms.

4. Affidavit

An affidavit ensuring all the submitted documents are accurate, true, and legally valid.

Partnership Firm Registration Process

Since a partnership isn't considered a separate legal entity, it may not require formal registration to begin. However, you can still register your business and get a certificate by taking the following steps:

  1. Choose the name of the business: Establish a unique name that doesn't violate active trademarks.
  2. Apply to the “Registrar of Firms” through Form A: Fill out the registrar application.
  3. Attach the required documents: Include identity and address proofs, specimen of Affidavit, etc.
  4. Attach the duly signed copy of the Partnership Deed: Needs to be signed by all partners.
  5. Pay the Fees and submit the form: Complete the registrar processing payment.
  6. Get the Registration Certificate: Once approved, your firm is registered and a certificate is issued.
  7. Open a bank account: Set up a current account in the name of your business.
  8. Obtain PAN and TAN: Secure tax identification numbers from the Income Tax Authority.

Compliances for a Partnership Firm Registration

For Partners

A partnership typically requires a minimum of two partners to be formed. The suggested number of partners cannot be more than 50 for any Partnership firm.

For Partnership Firm

  • File the Income Tax Return through ITR-5, irrespective of revenue or loss.
  • File quarterly TDS returns, if applicable.
  • In case of a GST registration, file GST returns every month and quarter as per the scheme under which you have registered.
  • Obtain a Tax Audit if the annual turnover exceeds Rs. 1 Crore.

Minimum Capital Requirement

A partnership firm has no minimum capital requirement mandated by law. The capital invested in a partnership is typically determined by mutual agreement among the partners and is specified in the Partnership Deed.

Tax Rates

For the Assessment Year 2023-24, a Partnership Firm is taxable at 30%. A surcharge of 12% is levied on the amount of income tax if the total income exceeds ₹ 1 Crore. Health & Education cess at 4% is applied on the amount of income tax plus surcharge.

Advantages and Disadvantages of Partnership Registration

Advantages

  • Easy Registration process: Simple documentation and registration steps with the Registrar of Firms.
  • Less compliance: Far fewer regulations compared to Private Limited Companies or LLPs.
  • Cost-efficiency: Setup registration and stamping fees are cheaper than other options.
  • Sharing of ownership: Joint liabilities help split operational duties and risks.

⚠️ Disadvantages

  • Unlimited Liabilities: Partners bear unlimited liability; personal assets can be used to recover debts.
  • Raising funds: Lack of share capital makes equity fundraising from VCs virtually impossible.

Registration Number for a Partnership Firm

Following the approval of Form A and the Partnership Deed by the Registrar of Firms (RoF), you will receive a Certificate of Registration. This registration certificate includes unique details such as the Firm's name, Registration Number, Date of Registration, and the State jurisdiction where the firm has been registered.

Partnership Firm Registration Time

Excluding Government Approval time, it takes approximately 7-10 days to register a Partnership Firm with the Registrar of Firms. However, the duration may vary depending on local state office backlogs.

Things that Delay a Registration Process:
  • Documents that are incomplete or contain errors.
  • Discrepancies found within the Partnership Deed.
  • Extra regulatory clearances or local zone permits.
  • Delays during the verification procedure by state authorities.

Partnership Firm Registration Fees

The Partnership registration fees vary significantly from one state to another, primarily due to differences in compliance requirements and stamp duty rates. Generally, registration fees for a Partnership Firm range from Rs. 500 to Rs. 3,000.

*The stamp duty is determined based on the capital contributed by the partners and the specific rules of the state.

Checklist for Registration

Select a unique name for your business.
Draft a compliant Partnership Deed.
Apply for Registration with the Registrar of Firms (RoF).
Acquire the Certificate of Registration.
Apply and acquire PAN and TAN for the Firm.
Set up a current account in the firm's name.
Stay updated with tax and compliances.

Frequently Asked Questions

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