A Partnership firm is a business entity created by persons who have agreed to share profits or loss of the business. Partnership are a very good choice of Business entity for small enterprises wherein two or more persons decides to contribute to a business and share the profits or losses. In India partnership are widely prevalent because of its ease of formation and minimal regulatory compliance, Also the concept of LLP was introduced only in 2010, Where the Partnership Act, 1932 has been in existence before the independence of India. Hence partnership firms are the most prevalent type of business entity wherein A group of people are involved.
Type of partnership
There are two types of partnership registered partnership and unregistered Partnership. In terms of the Indian partnership Act, 1932 (ACT}, the only criterion to commence business as a partnership is the finalization and execution of a partnership Deed between the partners. The act does not require the partnership deed/partnership firm to be registered and in other words, does not require the partnership firm to be a registered firm. Therefore, various partnership business exists as an unregistered firms. There are no penalties for non-registered of a partnership firm and a partnership firm can even be registered after formation. However unregistered partnership firms have certain rights denied in section 69 of the partnership Act which deals with the effects of non-registered partnership firm some of the disadvantages of an unregistered firm are:
- A partner of unregistered firm can not file a suite in any court against the Firm or other partners for the enforcement of any rights arising form a contract or right conferred by the partnership Act.
- No suite to enforce a right arising form an agreement can be instituted in any court by or on behalf of a firm against any third party unless the firm is registered.
- An unregistered firm or any of its partners cannot claim set off or other proceedings in a dispute with a third party.
Therefore, any partnership should be registered sooner or latter.
Documents required for registration
The application for registration of partnership firm must contain the prescribed registration form, Identity proof/address proof of partners certified a true copy of the Partnership deed entered into and proof of the principal place of business, as identity and adders proof of the partners. Following documents are required:
- PAN Card of the Partners.*
- Address Proof of the Partners.(DL/Voter id/Passport)*
- Utility Bill of the proposed Registered Office*
- No-Objection Certificate from the Landlord*
- Rental Agreement Copy between the Partner and the Landlord*
- Partnership Deed.*
- Bord Ressolution form Authorized partners.*
- Mobile no and email Id of the Partners.*