Partnership Firm Registration Coimbatore

Partnership Firm Registration is required for businesses operating as a partnership firm in India. It helps to establish the legal identity of the firm and provides various legal benefits. A Partnership Firm, a favored business model, involves two or more individuals sharing profits based on an agreed ratio. The registration process is minimal compared to other entities.

Partnership Firm Name

Any name can be given to a partnership firm as long as you fulfil the following conditions: The name shouldn’t be too similar or identical to an existing firm doing the same business, The name shouldn’t contain words like emperor, crown, empress, empire or any other words which show sanction or approval of the government.

Partnership Deed

The Indian Partnership Act, 1932 governs and regulates partnership firms in India. The persons who come together to form the partnership firm are knowns as partners. The partnership firm is constituted under a contract between the partners. The contract between the partners is known as a partnership deed which regulates the relationship among the partners and also between the partners and the partnership firm.

Details Required in a Partnership Deed

General details

• Name and address of the firm and all the partners.
• Nature of business.
• Date of starting of business Capital to be contributed by each partner.
• Capital to be contributed by each partner.
• Profitloss sharing ratio among the partners.

Specific details

Apart from these, certain specific clauses may also be mentioned to avoid any conflict at a later stage:

• Interest on capital invested, drawings by partners or any loans provided by partners to the firm.
• Salaries, commissions or any other amount to be payable to partners.
• Rights of each partner, including additional rights to be enjoyed by the active partners.
• Duties and obligations of all partners.
• Adjustments or processes to be followed on account of retirement or death of a partner or dissolution of the firm.
• Other clauses as partners may decide by mutual discussion.

Benefits of Partnership Firm Registration

Easy to Incorporate

The incorporation of a partnership firm is easy as compared to the other forms of business organisations. The partnership firm can be incorporated by drafting the partnership deed and entering into the partnership agreement. Apart from the partnership deed, no other documents are required. It need not even be registered with the Registrar of Firms. A partnership firm can be incorporated and registered at a later date as registration is voluntary and not mandatory.

Less Compliances

The partnership firm has to adhere to very few compliances as compared to a company or LLP. The partners do not need a Digital Signature Certificate (DSC), Director Identification Number (DIN), which is required for the company directors or designated partners of an LLP. The partners can introduce any changes in the business easily. They do have legal restrictions on their activities. It is cost-effective, and the registration process is cheaper compared to a company or LLP. The dissolution of the partnership firm is easy and does not involve many legal formalities

Quick Decision

The decision-making process in a partnership firm is quick as there is no difference between ownership and management. All the decisions are taken by the partners together, and they can be implemented immediately. The partners have wide powers and activities which they can perform on behalf of the firm. They can even undertake certain transactions on behalf of the partnership firm without the consent of other partners.

Sharing of Profits and Losses

The partners share the profits and losses of the firm equally. They even have the liberty of deciding the profit and loss ratio in the partnership firm. Since the firm’s profits and turnover are dependent on their work, they have a sense of ownership and accountability. Any loss of the firm will be borne by them equally or according to the partnership deed ratio, thus reducing the burden of loss on one person or partner. They are liable jointly and severally for the activities of the firm.

Timelines for Partnership Firm Registration

The partnership firm registration process takes approximately 10 days, subject to departmental approval and reverts from the respective department.

Procedure for Registering a Partnership Firm

Step 1: Application for Registration

Step 2: Selection of Name of the Partnership Firm

Step 3: Certificate of Registration

Documents Required for Partnership Firm Registration

• PAN Card of all partners.
• Partnership Deed.
• Passport-size photographs of the partners.
• Identity and address proof of partners (Aadhaar, Voter ID, etc.).
• Proof of registered office address.
  • Rental Agreement Copy (if rented)
  • Copy of Electricity Bill for the Premises

FAQ

Can a firm become a partner in another firm?

A partnership firm cannot be a partner in another firm as it lacks legal personhood. However, individual partners within the firm may participate in other partnerships in their personal capacity.

Partnership Firm Registration Links

☛Partnership Firm Registration Service ☛Partnership Deed ☛Partnership Firm Benefits ☛Documents Required for Partnership Firm