What is a Partnership firm?

A partnership firm is a type of business structure where two or more individuals come together with the aim of carrying on a business for profit. It is based on a partnership agreement between the partners, which outlines the terms and conditions governing the partnership.

In a partnership firm, the partners contribute capital, skills, and resources to the business. They share the profits and losses in a manner agreed upon in the partnership agreement. Each partner has the authority to participate in the management and decision-making of the firm, unless otherwise specified in the agreement.

What are the characteristics of a Partnership Firm?

Here are some key characteristics of a partnership firm:

It is important for partners to have a clear understanding of their roles, responsibilities, and obligations in a partnership firm. While partnerships offer flexibility and ease of formation, it is advisable to have a well-drafted partnership agreement to govern the rights, duties, and expectations of the partners. Consulting with a legal or financial professional is recommended when establishing a partnership firm.

What are the characteristics of a Partnership Firm?

Steps to Register as a Partnership Firm

Step 1: Choose name for a partnership

Step 2: Draft a Partnership Deed

The partnership deed is the most important document for the registration of the company as it provides the registrar with the following necessary information:

Additionally, the Deed also contains information about the remuneration payable to partners in excess of the profit shares, responsibilities of partners, audit procedures, etc.

Step 3: Apply for a PAN Card in the Partnership Name

Step 4: File a Registration Application

Step 5: Submit the Documents

Step 6: Pay the Fees & Stamp duties

Step 7: Finalize the Deed

Step 8: Certification from the Registrar

Documents Required

Duly filled application form with passport-sized photographs
Identity and Address proofs of partners
PAN card and address proof of partnership firm (NOC from owner if property is rented)
Partnership Registration Certificate
Any registration document issued by state or central government, such as GST Registration
Any other document required by the respective authority

Key Features of a Partnership Firm
Benefits of a Partnership Registration

Easy to Incorporate
Attracts minimal Compliances
Allows partners to make quick decision
Profits and Loss Ratio is at the partners’ discretion

Partnership Firms Vs Limited Liability Partnership

A brief comparison between a Partnership Firm and a Limited Liability Partnership (LLP):

It's important to note that the specific characteristics and regulations may vary depending on the jurisdiction and applicable laws. It is advisable to consult with a legal or financial professional to understand the specific implications and requirements related to partnership firms and LLPs in your jurisdiction.

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