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Partnership firm registration

Draft the partnership deed and register your firm with the Registrar of Firms.

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About Partnership firm registration

A partnership firm is formed when two or more persons agree to share the profits of a business that all of them, or any of them acting for all, carry on. It is governed by the Indian Partnership Act, 1932. The rights and duties of the partners are written in a partnership deed. The firm has no separate legal identity from its partners, and each partner is jointly and severally liable for the firm's debts.

Registration with the Registrar of Firms is optional, but it is strongly advised. An unregistered firm, or a partner of it, cannot go to court to enforce a right arising from a contract against third parties or against the other partners. A registered firm also finds it easier to open bank accounts, take loans and register for GST. The number of partners is limited to 50. The firm is taxed on its own income at the rate set for firms, and partners are taxed on what they receive as remuneration and interest within the limits of the Income Tax Act.

Who needs it

  • Two or more people starting a business together
  • Families and friends who want to run a shop or trading business jointly
  • Existing unregistered firms that need a proper deed and registration
  • Firms that are changing partners, capital or profit sharing and need a revised deed

Documents required

1. Partnership deed

  • Deed on non-judicial stamp paper of the value required by the state, signed by all partners and witnessed
  • Name of the firm, nature of business, principal place of business and branches
  • Capital contributed by each partner, profit and loss sharing ratio, interest on capital and remuneration
  • Rules for admission, retirement, death of a partner, dissolution and settlement of accounts

2. Partners

  • PAN and Aadhaar of every partner
  • Passport-size photographs of every partner
  • Residential address proof of every partner
  • Mobile number and email ID of each partner

3. Business premises

  • Rent agreement or sale deed of the principal place of business
  • Owner's no-objection letter if the premises are rented
  • Latest electricity bill or property tax receipt of the premises

4. Application to the Registrar of Firms

  • Application in the prescribed form (Form 1) giving firm name, place of business, names and addresses of partners and the date each joined
  • Signatures of all partners and a verification of the particulars
  • Registration fee as prescribed by the state, with the stamped deed attached

5. After registration

  • PAN of the firm
  • Current account in the firm's name
  • GST, Udyam and other registrations as needed
Exact requirements can vary with your case and the authority. We confirm the final list when you contact us, so you collect everything once.

Clauses a good partnership deed should cover

  • Name, address and nature of business
  • Date of commencement and duration of the partnership
  • Capital contribution of each partner and how more capital is brought in
  • Profit and loss sharing ratio
  • Interest on capital and on drawings, and partner remuneration
  • Authority of partners, bank account operation and signing powers
  • Books of account and financial year
  • Admission, retirement, expulsion and death of a partner
  • Dissolution, settlement of accounts and dispute resolution

How we do it

  1. Decide the termsFirm name, capital, profit ratio, remuneration, roles of each partner and exit rules.
  2. We draft the deedWe prepare the partnership deed to match what you agreed and explain each clause.
  3. Stamp and signThe deed is printed on the correct stamp paper and signed by all partners with witnesses.
  4. File with the RegistrarWe prepare Form 1 and the supporting documents and file them with the Registrar of Firms for your district.
  5. Receive the certificateThe Registrar enters the firm in the Register of Firms and issues the certificate of registration.
  6. Set up the firmWe then apply for the firm's PAN, bank account, GST and other registrations.

Time it takes

Deed drafting usually takes 1 to 3 days after terms are final. The Registrar's certificate typically takes a few days to a few weeks, depending on the office. Stamp duty and fees depend on the state and are confirmed when you contact us.

Frequently asked questions

Is registration of a partnership firm mandatory?

No. The Act does not make it compulsory, but an unregistered firm loses the right to sue to enforce contract rights, so registration is advised.

How many partners can a firm have?

A minimum of two. The upper limit is 50 partners.

Can the partners change terms later?

Yes. Changes such as new partners, a change in capital or profit sharing are recorded in a supplementary or revised deed, and the Registrar is informed.

How is a firm different from an LLP?

In a firm, partners have unlimited personal liability. In an LLP, each partner's liability is limited to the agreed contribution, but the LLP has more filing requirements.

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