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Partnership Firm - An Overview

Partnership Firm is a form of business setup wherein a formal agreement between 2 or more people is signed to manage and operate a business. Those people agree to be co-owners and distribute responsibility for running an organization and share income and losses that a business generates.

In India, we have a definite law that covers all aspects and functioning of a partnership, The Indian Partnership Act 1932. The act also defines a partnership as “the relation between two or more persons who have agreed to share the profits from a business carried on by either all of them or any of them on behalf of/acting for all”. At firststartup, we provide a quick partnership registration that can be given with complete compliances in 2 days. You can contact our experts for gaining more knowledge on Partnership registration.

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Table of Contents

Partnership Firm - An OverviewWhy Partnership Setup is Popular in IndiaPapers & Forms RequiredMandatory RequirementsTypes of PartnershipRegistration Process

Partnership Firm - An Overview

Partnership Firm is a form of business setup wherein a formal agreement between 2 or more people is signed to manage and operate a business. Those people agree to be co-owners and distribute responsibility for running an organization and share income and losses that a business generates.

In India, we have a definite law that covers all aspects and functioning of a partnership, The Indian Partnership Act 1932. The act also defines a partnership as “the relation between two or more persons who have agreed to share the profits from a business carried on by either all of them or any of them on behalf of/acting for all”. At firststartup, we provide a quick partnership registration that can be given with complete compliances in 2 days. You can contact our experts for gaining more knowledge on Partnership registration.

Why Partnership Setup is Popular in India

•Easy registration
•LLP act was introduced in 2010 but partnership act came in 1932, hence more people are involved and comfortable with this kind of setup for any business start
•Low cost and ease in setting up
•Minimum compliances
•Simple to begin
•Flexible as partners can initiate the changes the way they want to meet the desired results
•Shared Risk
•More funds available as partners also contribute to the capital
•Audit not required

Papers & Forms Required

•Form No. 1 (Application for registration under Partnership Act)
•Partnership Deed signed by partners
•Confirmation in the form of affidavit to become a partner
•Identity Proof of Company (i.e. PAN)
•Address Proof
•Proof of Nationality for Foreign Nationals
•Latest Electricity bill, telephone bill & Bank statement of partners
•Photo
•If property on rent, then rent agreement with NOC from landlord

Mandatory Requirements

•Minimum 2 partners
•Maximum - 20 partners
•No minimum capital required
•Unique Company Name

Types of Partnership

There are several types of partnerships:

•General Partnership: A general partnership comprises of two or more owners to run a business. In this partnership, each partner represents the firm with equal rights. All partners can participate in management activities, decision making, and have the right to control the business. Similarly, profits, debts, and liabilities are equally shared and divided equally.
•Limited Partnership: This partnership includes both general and limited partners. The general partner has unlimited liability, manages the business, while the limited partners have limited control over the business (limited to their investment). They are not associated with the everyday operations of the firm.
•Limited Liability Partnership: In Limited Liability Partnership (LLP), all the partners have limited liability. Each partner is guarded against other partners' legal and financial mistakes.
•Partnership at Will: This can be defined as when there is no clause mentioned about the expiration of a partnership firm. Under section 7 of the Indian Partnership Act 1932, the two conditions that must be fulfilled by a firm to become a Partnership at Will are: The partnership agreement should have no fixed expiration date and no determination of the partnership should be mentioned.

Registration Process

Step 1

Fill our Partnership form online

Step 2

Verification of shared papers by our verified expert

Step 3

Drafting of Partnership Deed. Registrar will approve the application

Step 4

Apply for TAN and PAN of the Partnership firm. Open a bank account on the firm’s name.

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