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To create a partnership firm, partners must sign a partnership deed, which is also known as a partnership agreement. The stamp duty imposed on partnership agreements/deeds varies by state. As a result, when drafting a partnership instrument (Deed), the partners must acquire stamp paper of suitable value, as determined by the state, to be attached to the agreement. You can also have the agreement notarized. The Partnership Act of 1932 does not require the registration of a partnership firm. Non-Registration, on the other hand, has a specific impact under Section 69 of the act. An unregistered firm is not allowed to recover more than Rs. 100, according to Sectio 69. As a result, we strongly advise you to register your partnership with the Registrar of Firms ( ROF).
The firm’s name should be unique, and it should not be the same as or similar to the name of any other trademark that has been registered or applied for.
To become a partner in the firm, two people are required. However, a firm can only have a maximum of 20 partners (10 in the banking business)
There is no minimum capital requirement; it must be based on the needs of the firm. The Stamp Duty on the deed is determined by the firm’s capital.
Foreign ownership of a partnership firm is prohibited by law. Only an Indian citizen can join the partnership firm and become a partner.
To avoid violation of someone else’s trademark or brand name, cross-check the name of the partnering firm with the trademark registration.
The Partnership Deed is the document that establishes the relationship between partners as well as the relationship between partners and the firm.
The Partnership Deed must be carefully prepared, and the partners’ signatures on the agreement must be witnessed before a Notary.
Filing the signed partnership agreement, along with the partners’ KYC and evidence of location, with the relevant Registrar of Firms for registration.
Two Photographs of Each Partner
PAN Card Copy of Partners
Identity Proof (Voter ID / Driving License / Passport)
Address Proof (Bank Statement / Electricity, Mobile, Telephone Bill)
Proof of Registered Office
Utility Bill as Proof of Registered Address
NOC from the Owner of the Premises
The lowest number of partners required to form a partnership is two, and the maximum number of partners is twenty. To carry on any legitimate business with the goal of making money, the partners must come together.
All partnership enterprises in India are governed under the Indian Partnership Act of 1932. The Act stipulates that there are two categories of partnership firms: unregistered and registered. An unregistered firm can be formed by a partnership agreement between two competent individuals who do not register the firm with the Registrar of Firms. The Registered Partnership Firm is created after you register the firm by submitting a copy of the partnership deed, the partners’ KYC, and the registered office.
Although the Indian Partnership Act of 1932 does not require partnership registration, Section 69 of the Act does impose some disadvantages on unregistered firms. The following are the drawbacks of an unregistered business.
As a result, we strongly propose that the partnership firm be registered. An unregistered business can be registered at any moment. Every state government establishes a Registrar of Firms office. It has the authority to register the partnership, issue the Certificate of Registration of the Partnership, and a copy of the extracts from the register of firms where the partnership name is entered
You must file an application for partnership firm registration with the Registrar of Firms in the jurisdiction where the partnership firm does business. After receiving a full application with all relevant papers, the registrar of firms registers the firm within 1-2 weeks and issues the Certificate of Registration of Firm.
The law does not provide a format for a partnership deed; it is up to the partners to decide what they want to put in writing when they create their partnership firm. Once a partnership has been formed, it can be altered as many times as necessary. Each change to the deed, on the other hand, must be filed with the registrar for registration. The following is a list of items that should be included in the contract.
A partnership firm can readily be transformed into a Limited Liability Partnership or a Private Limited Company. We usually propose starting a firm in the Private Limited form because partnerships are an antiquated way of doing business.
A partnership firm, unlike a limited company or LLP, does not need to file an annual return. Income Tax Returns, on the other hand, must be filed at the end of the fiscal year and within the filing deadline. Because the Partnership Act makes no provision for auditing, a business does not need to have its books audited. If the turnover exceeds 2 crores, however, a tax audit is required.
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