Procedure of Partnership Firm Registration In India

Author : Rohan Saharawat | Published On : 23 Mar 2024

Establishing a partnership firm in India involves a series of legal procedures aimed at formalizing the business structure and ensuring compliance with regulations. Partnership firms are popular due to their simplicity and ease of formation. This article elucidates the step-by-step process of registering a partnership firm in India.

Step 1: Choosing a Name

The first step in registering a partnership firm is selecting a unique name that complies with the guidelines provided by the Registrar of Firms. The chosen name should not infringe on existing trademarks and should not contain any offensive or prohibited words.

Step 2: Drafting Partnership Deed

A partnership deed is a crucial document outlining the terms and conditions of the partnership, including profit-sharing ratios, capital contributions, roles and responsibilities of partners, etc. The deed must be drafted carefully and signed by all partners in the presence of witnesses.

Step 3: Application for PAN and TAN

Partnership firms are required to obtain a Permanent Account Number (PAN) and Tax Deduction and Collection Account Number (TAN) from the Income Tax Department. These numbers are essential for tax purposes and financial transactions.

Step 4: Registration with the Registrar of Firms

Although registration of partnership firms is not mandatory, it is advisable to register to avail various benefits and legal protections. To register, the partnership deed along with the prescribed form must be submitted to the Registrar of Firms in the respective state where the firm is situated.

Step 5: Payment of Registration Fees

Upon submission of the necessary documents, registration fees must be paid to the Registrar of Firms. The fee structure varies from state to state.

Step 6: Verification and Approval

The Registrar of Firms scrutinizes the documents and verifies the information provided. If everything complies with the requirements, the Registrar issues a Certificate of Registration, confirming the formation of the partnership firm.

Step 7: Publication of Notice

After receiving the Certificate of Registration, it is mandatory to publish a notice regarding the formation of the partnership firm in at least one local newspaper and in the Official Gazette of the respective state.

Step 8: Obtaining Necessary Licenses and Permits

Depending on the nature of the business, partnership firms may need to obtain specific licenses and permits from relevant authorities. This includes GST registration, trade licenses, environmental clearances, etc.

Step 9: Opening Bank Account

Partnership firms must open a bank account in the name of the firm using the PAN and registration certificate. All financial transactions of the firm should be conducted through this account.