Business Registration(partnership) Overview
A partnership is a business arrangement that involves two or more people. A partnership isn’t a separate legal entity, so the liabilities in addition to the profits are shared by all the partners. The partners agree to do Business Registration through a partnership deed, this can be oral or written and can be registered as well. Business is optional according to the partnership act and can be done at any time not only before starting the business.
Benefits of Business Registration
- Ease of formation and closure: A partnership is formed and can be closed by an agreement, and will need any other procedure.
- Balanced Decision Making: Since there are two or more partners there is a sharing of responsibilities and balanced decision-making.
- Risk Sharing: Unlike a sole proprietorship, there are two or more people in a partnership and all the partners share the risk, so it is not limited to one person.
ReadMore: How to Register a Partnership Firm?
- Liability: Partners of the firm have unlimited liability, its shared amongst the partners in accordance with the partnership deed.
- Continuity: There is a lack of continuity in a partnership as the death, insolvency, or retirement of a partner can bring an end to the Business Registration and fresh agreements will be required.
- Application of registration (Form 1)
- Certified original copy of the Partnership Deed
- Proof of principal place of business ownership deeds lease agreement or utility bill
- PAN/Aadhar of Partners
Types of Partnerships
- A Partnership firm deed registration.
- Unregistered Partnership: A partnership deed is the only prerequisite for running a partnership firm, registration isn’t mandatory. But to go ahead with any legal claim registration is necessary and is thus recommended.
Procedure of Registration Partnership
- Partnership registration is provided for in Section 58 of the Indian Partnership Act.
- Form 1 and other required documents need to be filed with the registrar of firms in the area where the business is situated.
- If the registrar is satisfied with compliance he will grant a registration certificate.
- All partners need to provide a statement that is signed by all partners which must include:
- the firm-name,
- the nature of business of the firm;
- the place or principal place of business of the firm,
- the names of any other places where the firm carries on Business Registration,
- the date when each partner joined the firm,
- the names in full and permanent addresses of the partners, and
- the duration of the firm.
How many people are required to start a Partnership firm?
A minimum of 2 people are required and can go up to 20.
What is the capital required to start a Partnership firm?
Like a sole proprietorship, there is no limit.
How can I transfer my Partnership firm?
Interest in a partnership firm can be transferred only after all the living partners have expressly consented to such a transfer.
Can I later convert my Partnership firm into a Company or LLP?
Yes, there are procedures in place to do that, can refer to the registration of an LLP for that.
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