Cardiff Services

Partnership Firm

Partnership Firm Registration in India

A Partnership Firm is a popular form of business entity where two or more individuals collaborate to carry out business with the objective of earning profits. Partnership Firm Registration legally recognizes the firm with concerned authorities, giving it a separate legal identity, credibility, and ease of doing business.

Process of Partnership Firm Registration

In India, partnership firms are governed by the Indian Partnership Act, 1932. To register a partnership firm, the following steps are involved:

 

  1. Drafting the Partnership Deed

    • Must include:

      • Name and address of the firm

      • Names and addresses of all partners

      • Nature of business & business duration

      • Capital contributions of each partner

      • Profit-sharing ratio

      • Terms of dissolution

  2. Application for Registration

    • Submit the deed with the Registrar of Firms in the state where the firm is located.

    • Required documents include:

      • Copy of Partnership Deed

      • Proof of address of the firm

      • Identity and address proof of each partner

  3. Certificate of Registration

    • Upon successful verification, the Registrar issues a Certificate of Registration.

    • This confirms that the partnership firm is legally recognized and can commence operations.

Why Register a Partnership Firm?

  • Provides legal recognition

  • Enhances credibility and trust among clients, vendors, and financial institutions

  • Facilitates access to loans and credit

  • Offers structured management and clear partner responsibilities

Features of a Partnership Firm

  • Minimum Members – A partnership firm must have at least 2 partners. For banking businesses, the maximum limit is 10 partners, and for all other businesses, it is 20 partners.

  • Partnership Agreement – The firm operates on the basis of a Partnership Deed, which is a written contract outlining the rights, duties, and obligations of all partners.

  • Competency of Partners – Every partner must be legally competent to enter into an agreement (not a minor, insolvent, or of unsound mind).

  • Profit & Loss Sharing – Profits and losses are shared as per the ratio mentioned in the Partnership Deed. If not specified, they are shared equally among all partners.

  • Unlimited Liability & Continuity – Partners have unlimited liability, and the firm has no separate legal identity from its partners. It does not enjoy perpetual succession like companies.

Documents Required for Partnership Firm Registration in India

To register a Partnership Firm in India, the following documents are essential:

  1. Partnership Deed

    • A legal document outlining terms & conditions of the partnership such as business nature, profit-sharing ratio, capital contributions, and partners’ rights & responsibilities.

  2. PAN Card of Partners

    • Mandatory PAN cards of all partners, issued by the Income Tax Department.

  3. Address Proof of Partners

    • Aadhaar Card, Voter ID, Passport, Driving License, or any valid government-issued address proof.

  4. Identity Proof of Partners

    • Any government-issued identity proof like Aadhaar Card, Voter ID, Passport, or Driving License.

  5. Rental Agreement or Property Documents

    • If the firm operates from rented premises: a rental agreement is required.

    • If owned: property documents such as sale deed or property tax receipt.

  6. NOC from Landlord

    • In case of rented premises, a No Objection Certificate (NOC) from the landlord permitting use for commercial purposes.

  7. Bank Account Proof

    • Bank account statement or cancelled cheque in the name of the partnership firm.

  8. Photographs

    • Passport-sized photographs of all partners for registration records.

Note: Document requirements may vary depending on the state of registration and specific Registrar of Firms guidelines.

Procedure for Partnership Firm Registration in India

Registering a Partnership Firm in India involves a series of steps to ensure legal recognition and compliance. Below is the step-by-step procedure:

Step 1: Choose a Name for the Partnership Firm

Partners must select a unique business name that is not already in use by another registered entity.

Step 2: Draft a Partnership Deed

Create a Partnership Deed, a legal document that outlines:

  • Nature of business

  • Capital contribution of partners

  • Profit-sharing ratio

  • Rights, duties, and responsibilities of partners

Step 3: Obtain PAN & Address Proof

All partners must provide PAN cards and valid address proof such as Aadhaar Card, Passport, Driving License, or Voter ID.

Step 4: Obtain NOC from Landlord (if applicable)

If the business premises are rented, a No Objection Certificate (NOC) from the landlord is required.

Step 5: Register for GST (if applicable)

If annual turnover exceeds ₹20 lakhs, GST registration is mandatory.

Step 6: File the Application for Registration

Submit the application to the Registrar of Firms along with:

  • Partnership Deed

  • PAN cards & address proof

  • Rental agreement / NOC (if applicable)

  • Bank account proof

Step 7: Pay Registration Fees

Partners must pay the prescribed government fees for registration.

Step 8: Obtain Certificate of Registration

After verification, the Registrar of Firms issues a Certificate of Registration, confirming the firm’s legal existence.

Step 9: Obtain Other Licenses (if applicable)

Depending on the type of business, additional licenses may be required such as:

  • Trade License

  • Shop & Establishment License

  • Professional Tax Registration

Frequently Asked Questions

No, partnership registration is not mandatory under the Indian Partnership Act, 1932. However, registered firms enjoy legal recognition, better protection, and the ability to enforce contracts in court. Hence, it is highly recommended.

  • Minimum: 2 partners

  • Maximum: 50 partners (as per Companies Act, 2013)

The cost depends on the state of registration and professional fees. On average:

  • Drafting of Partnership Deed – ₹3,000 to ₹10,000

  • Government Registration Fees – ₹1,000 to ₹5,000

  • Additional license costs (GST, MSME, Shop & Establishment) vary

The process usually takes 7–14 working days, depending on documentation and state approval timelines.

Yes, the entire process can be completed online through digital documentation and submission to the Registrar of Firms.

No, foreign nationals cannot become partners in a traditional partnership firm. They can, however, be partners in an LLP (Limited Liability Partnership), which allows foreign investment under FEMA guidelines.