Partnership Firm Registration can Rise Your Business

A partnership firm ideally exists when a group of people decide to come up with a business with each other. For example, if you and your group of friends decide on starting a consultation service together, it will instantly become a partnership firm.

A partnership firm, when it comes into existence, will immediately require for itself to have a partnership firm registration. When the partnership firm registration takes place, that is only when that the firm will be recognised in the first place. A partnership firm registration exists to given an identity to the place. Along with this, there is also the requirement of a partnership deed format which is needed in order to successfully have a partnership firm which functions without any issues.

However, there are several steps that need to be followed for a partnership firm registration. The partnership deed format is also an important requirement, which has a number of steps involved and the partnership deed format should be exclusively taken note of and made to avoid any sort of mistakes.

How Should an Agreement be executed with a Partnership Firm Deed?

Partnership deed is ideally an agreement which is between the partners in which the rights, the duties, the profits and the shares and every other obligations of each of the partners is mentioned. Partnership deed can either be written or in an oral form, although it is always advisable to write a proper partnership deed format in order to avoid any conflicts in the future with regard to the firm.

Why is it necessary to register a partnership firm in the first place?

The Indian Partnership Act, 1932 happens to govern all the partnerships. Registration of the partnership firm is always optional and it is completely the discretion of the partners whether they want to register their firm or not. Registration of partnership firm can be done at any time, which is before starting a business or it could be anytime while there is  the continuation of the partnership business.

It is always appropriate to register the firm since a registered firms always enjoy special rights which are never available to the firms that are not registered.

How can a firm be registered?

An application form which is also with fees has to be submitted to Registrar of Firms of the State in which the firm is located. The application is to be signed by all partners or the agents.

Acumens required for registration:

  • Application for registration of the partnership, which is Form 1.
  • Specimen of the Affidavit made.
  • Certified original copy of the Partnership Deed which is executed.
  • Proof of main place of business through ownership documents or rental or lease agreements.

The Need of a Partnership Firm Registration:

The main need for a partnership firm registrationis for ensuring that;

  • No other business or partnership firm has a name that is identical or similar to that of the partnership firm that you are creating.
  • That the name of the partnership firm should not have any words like emperor, crown, king, empress or any word which shows the sanction or involvement of the government. Any such thing can cancel the partnership firm registration in the first place.

The Requirement of a Partnership Deed Format

Before understanding how a partnership deed format works, it is important to understand what a partnership deed is in the first place. A partnership deed is ideally an agreement that allows partners of a firm to have a set of terms and conditions before the partnership firm registration, to which all the partners of the firm agree to.

A partnership deed format must contain the following information attached to it:

  • The firm’s business- The partnership deedformat will include the reason for the existence of the business.
  • Partnership’s duration- The time within which the partners will engage with each other in the business that they have taken up.
  • Share of profit and loss- The rise and fall of the business will be shared among all the partners of the firm.
  • Salary of the partners- The details of the salary that will be given to the partners.
  • Contribution of capital- The amount of capital which will be shared among the partners.
  • Drawings of the partners- The amount that can be drawn from the company or business’s share or stocks should be mentioned in the deed. This is an important detail that must not be forgotten during the registration of the partnership firm either.
  • Duties and Obligations of the partners- The partnership deed format should include all the duties and rules that the partners of the business and firm are expected to fulfil and abide by.
  • Admission, retirement or death of partner- The occurrence of any of these circumstances must be included and the plan herein after the occurrence must be included as well in the deed.