A partnership firm is a business form in which two or more individuals come together to operate and manage a business in accordance with terms and conditions set out in partnership deed.
Name given to the Partnership firm
How should be the agreement between partners formed?
Partnership deed is an agreement between the partners in which rights, duties, profits shares and other obligations of each partner is mentioned.
Partnership deed can be written or oral, although it is always advisable to write a partnership deed to avoid any conflicts in the future.
Following details are required in a partnership deed:
- 1. Name and address of the firm and all the partners
- 2. Nature of business
- 3. Date of starting of business Capital to be contributed by each partner
- 4.Capital to be contributed by each partner
- 5.Profit/loss sharing ratio among the partners
Is it necessary to register a partnership firm?
Indian Partnership Act, 1932 governs the partnerships. Registration of partnership firm is optional and at the discretion of the partners.
Registration of partnership firm may be done at any time – before starting a business or anytime during the continuation of partnership.
It is always advisable to register the firm since a registered firm enjoy special rights which aren’t available to the unregistered firms.
How to register the partnership firm?
An application form along with fees is to be submitted to Registrar of Firms of the State in which firm is situated. The application has to be signed by all partners or their agents.
DOCUMENTS TO BE SUBMITTED TO REGISTRAR ARE
- Application for registration of partnership (Form 1)
- Specimen of Affidavit
- Certified original copy of Partnership Deed
- Proof of principal place of business (ownership documents or rental/lease agreement)
If the registrar is satisfied with the documents, he will register the firm in Register of Firms and issue Certificate of Registration.