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Partnerships are a common form of business organization in India, particularly for a medium-scale business. With a partnership, you join forces with another person (or group of people) to run a business, sharing the profits. To register your partnership in India, you must first create a partnership deed, then register that deed with the Registrar of Firms. Partnership registration isn't required, but provides proof of the existence of your firm and allows you to switch to a different form of organization, such as an LLP or a company, more easily.[1]
Steps
Method 1
Method 1 of 2:Creating a Partnership Deed
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1Choose a name for your partnership. Choose a name that is unique and represents your business to the public. It can't be too similar to any other registered business names and can't include words such as "Crown" or "Empire," or any words that imply direct approval, sanction, or patronage by the government. These rules ensure that your business name won't potentially mislead your customers.[2]
- Enter the name you've chosen at http://www.mca.gov.in/mcafoportal/showCheckCompanyName.do to make sure it isn't already taken by another company. You can also check to make sure a domain name and trademark are available for your chosen name on the same website.
Tip: Once you've chosen your partnership name, register the trademark for additional legal protection. This will keep others from misleading the public with a name similar to yours.
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2Draft a basic partnership deed. The partnership deed describes your business and lists the rights and duties of each of the partners in your partnership firm. At a minimum, your partnership deed must include:[3]
- The name and address of the firm
- The names and address of the partners
- The nature of your business
- The duration of your partnership
- The capital contribution of each partner
- The profit-sharing ratio among the partners
Tip: There is a model partnership agreement available at https://www.karnataka.gov.in/law/Documents/Model-Partnership-Agreement.dot that you can download and adapt to suit your needs.
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3Add specific details to the partnership deed as needed. Beyond the basics, there are additional clauses that you can include in your partnership deed, depending on the needs or desires of the partners. Additional clauses typically cover hypothetical circumstances that may arise over the course of the partnership and provide a process for dissolving the partnership. Examples of some other areas you might cover include:[4]
- Procedures for admitting or introducing a new partner
- Interest on partners' capital contributions
- Salaries or commissions payable to partners
- Division of powers and responsibility among the partners
- Audit procedures
- Procedures in the event of the retirement or death of a partner
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4Finalize the deed in the proper format. To be legal, your partnership deed needs to be printed on stamp paper and signed by each of the partners. The partners' signatures should be signed in front of a notary. The notary will stamp each signature as valid.[5]
- The value of the stamp paper required for a partnership deed varies depending on location. You can find the amount by checking the Stamp Act for the state in India where your partnership is located.
- After the deed is signed, make enough copies that each partner has a copy for their records. Keep the original as part of the business records.
- Go to https://biharregd.gov.in/Society/Online/PARTNER_DEED.pdf if you want to see an example of a finalized deed on stamp paper.
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5Apply for a PAN card for the partnership firm. Even though the partnership firm is not distinct from the partners for tax purposes, you still must get a PAN in the name of the partnership. You are required to pay taxes for the partnership under this PAN regardless of whether you register your partnership.[6]
- You can complete the application online at https://www.onlineservices.nsdl.com/paam/endUserRegisterContact.html. The authorized partner will have to sign the application using a digital signature certificate.
Tip: If you're going to register your partnership firm with the Registrar of Companies, you must first have a PAN for the partnership.
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Method 2
Method 2 of 2:Filing Your Registration Application
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1Complete your registration application. Your registration application includes basic information about your firm, including the partnership's name and business address, the names and addresses of all the partners, the duration of the partnership, and the date you started business. Each partner must sign the application in the presence of a notary, who will notarize the signature.[7]
- Download a blank copy of the form at https://karunadu.karnataka.gov.in/karigr/Downloads/Formats%20under%20Indian%20Partnership%20Act/Frm%201.pdf if you want to complete it in advance.
- You can look at an example of a completed form at https://biharregd.gov.in/Society/Online/FORM1.pdf.
Tip: Because registration of a partnership is optional, you can register the partnership before you start business or at any time thereafter. You don't have to wait until registration is complete to do business under the partnership name.
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2Submit your application and supporting documents. Take your paper application to the Registrar of Companies to complete your registration. To locate the Registrar of Companies nearest you, go to http://www.mca.gov.in/MinistryV2/registrarofcompanies.html and scroll through the list. In addition to your application, bring the following documents:[8]
- A certified original copy of your Partnership Deed
- The PAN card for your partnership firm
- Address proof for the partnership firm (ownership deed or lease)
- PAN cards and proof of address for all partners
- An affidavit certifying all details in the application are correct
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3Pay your fees and stamp duties. When you take your documents to register your partnership, the Registrar will tell you any fees and stamp duties that you owe. These fees vary depending on your business's location. Your partnership will not be registered until all fees and duties are paid.[9]
- You may want to call ahead to the Registrar's office and find out what the fees are in your area.
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4Wait to receive your certificate from the Registrar. The Registrar reviews your application and documents. If everything is in order, the Registrar will officially register your partnership firm. Within a few weeks, the official registration certificate will be mailed to your business address.[10]
- You should get the certificate within a few weeks of the date you submitted your application. However, since registration of a partnership isn't legally required, you don't need the certificate to start doing business.
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Community Q&A
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QuestionHow long does it take to register a partnership firm? Is there some way for me to check the status of an application?
wikiHow Staff EditorThis answer was written by one of our trained team of researchers who validated it for accuracy and comprehensiveness.
Staff AnswerwikiHow Staff EditorStaff AnswerThe Registrar nearest you can give you a good idea of how long it takes to process registration, as this may vary depending on where you're located and the volume of applications the office receives. Since registration isn't mandatory, though, you don't have to wait until registration is complete to start doing business.
Support wikiHow by unlocking this staff-researched answer.
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QuestionCan I be a partner in a technical consulting firm if I am a non-technical person?wikiHow Staff EditorThis answer was written by one of our trained team of researchers who validated it for accuracy and comprehensiveness.
Staff AnswerwikiHow Staff EditorStaff AnswerAbsolutely! If you believe in the business and have other skills to contribute, you could be an asset to the firm. The choice to include you as a partner would be up to the other partners in the business. Typically, if you didn't have technical skills to offer, they would expect a larger capital investment.Support wikiHow by unlocking this staff-researched answer.
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QuestionHow do I change the name of my partnership firm?wikiHow Staff EditorThis answer was written by one of our trained team of researchers who validated it for accuracy and comprehensiveness.
Staff AnswerwikiHow Staff EditorStaff AnswerYou can change your name at any time after registration. All you have to do is draft a new partnership firm and complete the application at the Registrar of Companies officer nearest you to update your registration. Make sure you check the name first to make sure it's not already taken by another business.Support wikiHow by unlocking this staff-researched answer.
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QuestionI am a private company director. Can I register a partnership firm?wikiHow Staff EditorThis answer was written by one of our trained team of researchers who validated it for accuracy and comprehensiveness.
Staff AnswerwikiHow Staff EditorStaff AnswerAs the director of a private company, you are free to start another business as a partnership firm. You could then register that partnership. You likely wouldn't want to change the structure of the private company to a partnership, although you possibly could. Doing so would require the consent of your shareholders. Talk to a business lawyer near you for more information.Support wikiHow by unlocking this staff-researched answer.
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QuestionCan I file a lawsuit against my partner if they're not sharing any profits with me?wikiHow Staff EditorThis answer was written by one of our trained team of researchers who validated it for accuracy and comprehensiveness.
Staff AnswerwikiHow Staff EditorStaff AnswerYou can, provided you have a duly signed partnership deed and your partnership is registered. Registration is required to sue a partner for any rights or duties arising out of the partnership deed.Support wikiHow by unlocking this staff-researched answer.
Warnings
- While registration of a partnership is not legally required, none of the partners can file a lawsuit to enforce rights or duties under the partnership deed unless the partnership is registered.[11]Thanks!
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References
- ↑ https://www.toppr.com/guides/business-studies/forms-of-business-organisations/partnership-deed-and-registration/
- ↑ http://www.mca.gov.in/Ministry/actsbills/pdf/Partnership_Act_1932.pdf
- ↑ https://www.startupindia.gov.in/content/dam/invest-india/Templates/public/Tools_templates/internal_templates/in_hindi/Instructions_on_contracts_and_agreement.pdf
- ↑ https://cleartax.in/s/partnership-registration-india-explained
- ↑ https://www.startupindia.gov.in/content/dam/invest-india/Templates/public/Tools_templates/internal_templates/in_hindi/Instructions_on_contracts_and_agreement.pdf
- ↑ https://cleartax.in/s/documents-required-partnership-registration-india
- ↑ https://www.toppr.com/guides/business-studies/forms-of-business-organisations/partnership-deed-and-registration/
- ↑ https://cleartax.in/s/documents-required-partnership-registration-india
- ↑ https://www.toppr.com/guides/business-studies/forms-of-business-organisations/partnership-deed-and-registration/
About This Article
If you need to register a partnership in India, start by choosing a unique business name that doesn't include words that imply direct approval or sanction by the government, like "crown" or "empire." Next, draft a detailed partnership deed, print it out on stamp paper, and get it signed by each of the partners in front of a notary. Then, apply for a PAN in the name of the partnership, which is required for tax purposes. Once you have a deed and PAN, bring your completed registration application and the required supporting documents to the Registrar of Companies location closest to you. The Registrar will review your application and, if approved, send you a registration certificate within a few weeks of submission. To learn more about creating a partnership deed, read on!
