What is Partnership?
A partnership firm is a business structure where two or more individuals come together to conduct business with shared responsibilities and liabilities. The partners collaborate under a formal agreement known as the Partnership Deed, which outlines the terms of their business relationship, including profit sharing and operational roles.
In a partnership, all partners are jointly and severally liable for the firm’s debts and obligations. Partnership firms are popular due to their simplicity and flexibility, allowing entrepreneurs to pool their resources, skills, and expertise. Some partnership structures allow for varied profit and liability distributions, making it a versatile business model.
In the below discussion, we will be explaining the service of unregistered partnership firms, which will be referred to as Partnership Firm Registration. This registration service helps in formalizing the partnership, ensuring the business is legally recognized and can operate smoothly under the protection of the law.
Partnership Firm Registration
Registering your partnership firm is a crucial step towards formalizing the business and ensuring its legal recognition. It marks the start of a transparent and structured operation, protecting both the partners and the business itself.
Types of Partnership Firms
1. Unregistered Partnership Firm
An Unregistered Partnership Firm refers to a partnership that has not been formally registered with the Registrar of Firms. Although this type of partnership is still governed by the Indian Partnership Act, 1932.
In the case of an unregistered firm, the Partnership Deed still exists to define the roles, responsibilities, and profit-sharing ratio among partners, but the firm does not receive the legal recognition that comes with official registration. Some disadvantage of an unregistered partnership firm include:
- Limited Credibility: Unregistered firms may face challenges in establishing trust with clients, vendors, or financial institutions.
- Personal Liability: Partners in an unregistered firm are still personally liable for the debts and obligations of the business.
While operating as an unregistered partnership firm may be easier and quicker to set up, it can limit the firm’s ability to grow and face legal hurdles when dealing with third parties.
2. Registered Partnership Firm (with Registrar of Firms)
A Registered Partnership Firm is a partnership that has been formally registered with the Registrar of Firms in the respective state. This process ensures that the firm is legally recognized and can enjoy the benefits and protection provided by law. The registration process includes submitting the Partnership Deed and other required documents to the registrar. Key features of a registered partnership firm include:
- Legal Recognition: A registered firm is recognized by law, making it easier to enter into contracts, protect intellectual property, and resolve disputes.
- Increased Credibility: Registration enhances the firm’s reputation with clients, suppliers, and financial institutions, improving business opportunities.
- Ability to Sue: A registered firm can sue or be sued in its own name, providing legal protection in case of disputes.
- Easier to Raise Capital: Registered firms are more likely to obtain financing from banks and other financial institutions, as they are considered more credible.
- Tax Benefits: Registered partnership firms can enjoy certain tax advantages and exemptions that unregistered firms may not be able to access.
At eTaxCart, we simplify the partnership firm registration process. Our comprehensive online service provides everything you need, from drafting the Partnership Deed to submitting it for official registration. Whether you are starting a new venture or formalizing an unregistered partnership, our team of experts ensures a smooth and affordable registration process.
Advantages of Partnership
At eTaxCart, our mission is to make tax and compliance stress-free — so you can focus on growing your career, your business, or your next big idea.
Ease of Formation
Partnership firms are easy and quick to establish, requiring minimal legal formalities and documentation.
Less Costly to Form
Registering a partnership firm is less expensive compared to forming a corporation or limited liability company.
Shared Resources
Partners can pool their resources (financial, intellectual, etc.) to run the business efficiently.
Flexible Profit Sharing
Profit distribution can be tailored according to the partnership deed, allowing flexibility based on individual contributions.
Less Regulatory Compliance
Compared to corporations, partnership firms are subject to fewer regulatory requirements and less paperwork.
Tax Benefits
Partnerships may enjoy favorable tax treatment since they are taxed only on profits, avoiding double taxation.
Increased Capital
Partners contribute capital and resources, increasing the financial strength of the firm.
Operational Flexibility
Partnerships allow partners to decide the terms of operation and management based on their preferences.
Better Credibility
Registered partnerships enhance the firm’s credibility with clients, suppliers, and investors
Simple Dissolution Process
In case the business needs to be closed, partnership firms can be dissolved with comparatively minimal paperwork.
Diadvantages of Partnership
These are the disadvantages of a Partnership Registration
Unlimited Liability
Partners are personally liable for the debts and obligations of the firm, which could lead to significant financial risks.
No Separate Legal Entity
A partnership firm does not have a separate legal identity apart from its partners, limiting its legal and operational independence.
Difficult to Transfer Ownership
Transferring ownership in a partnership is complicated, as it requires the agreement of all partners.
Limited Access to Finance
Partnership firms may find it difficult to raise capital compared to corporations, as they cannot issue shares to the public.
Exposure to Personal Risk
Since partners are personally liable for business debts, their personal assets may be at risk if the business fails or faces financial difficulties.
Key Features of Partnership
Here are the key features of a Partnership in India
Required Documents for Partnership Registration
To ensure a seamless and efficient registration process for a Partnership, the following documents are essential. These documents are organized based on the requirements for partnership.
Stages of Partnership
Application
Draft the Partnership Deed with all necessary clauses.
Digital Signature
Share the final version of the deed with the customer for approval.
Draft Finalization
Apply for the PAN card for the partnership firm.
Our Pricing Plans
Choose the plan that best fits for you. We have three major plans to offer.
Starter
- Drafting of partnership deed
- Execution of partnership deed
- PAN
- TAN
Elite
- All features outlined in the growth package.
- One time filing GST registration application
- MSME Registration
- One trademark filing in the name of an individual/partner
- Four quarterly TDS returns, if applicable
- Accounting and bookkeeping services (up to 75 transactions)
- ITR filing of partnership firm (Turnover up to 30 Lakhs)
- ITR filing of two partners(income up to 10 Lakhs)
Govt. Fees
View Fees
| State of Registration | Partnership Agreement Stamp and notary for Capital 10,000 |
|---|---|
| Maharashtra | ₹ 1,000.00 |
| Delhi | ₹ 1,000.00 |
| West Bengal | ₹ 150.00 |
| Uttar Pradesh | ₹ 750.00 |
| Karnataka | ₹ 5,000.00 |
| Tamilnadu | ₹ 300.00 |
| Gujarat | ₹ 1,000.00 |
| Haryana | ₹ 1,000.00 |
| Rajasthan | ₹ 4,000.00 |
| Kerala | ₹ 5,000.00 |
| Bihar | ₹ 2,500.00 |
| Madhya Pradesh | ₹ 2,000.00 |
| Andhra Pradesh | ₹ 500.00 |
| Punjab | ₹ 1,000.00 |
| Jharkhand | ₹ 2,500.00 |
| Assam | ₹ 100.00 |
| Uttarakhand | ₹ 750.00 |
| Goa | ₹ 150.00 |
| Himachal Pradesh | ₹ 100.00 |
| Manipur | ₹ 100.00 |
| Tripura | ₹ 100.00 |
| Meghalaya | ₹ 100.00 |
| Arunachal Pradesh | ₹ 100.00 |
| Nagaland | ₹ 100.00 |
| Daman and Diu | ₹ 150.00 |
| Dadar nagar Haveli | ₹ 1,000.00 |
| Mizoram | ₹ 100.00 |
- Above government fees, stamp and notary charges might change depending on state to state from time to time by respective Govts/vendors
- Government fees for trademark extra in elite package
- The customer is responsible for purchasing stamp paper from their respective state and printing the finalized version of the LLP agreement provided by the eTaxcart team. The agreement must also be notarized. The cost for this process will be borne by the customer.
- Audit is not included
Why Choose Us for Partnership Registration?
At eTaxCart, our mission is to make tax and compliance stress-free — so you can focus on growing your career, your business, or your next big idea.
Simple and Quick Process
We make the registration process smooth and hassle-free, ensuring you can focus on growing your business.
Affordable Fees
Our registration services are cost-effective, offering great value for your investment in establishing a Partnership Firm.
Expert Guidance
Our professionals guide you through every step of the registration process, ensuring it is seamless and efficient.
Frequently Asked Questions
Here are the answers of the questions we received frequently.
A partnership deed is like a rulebook for your business. It explains the responsibilities of each partner, how profits and losses are shared, and how decisions are made. This document ensures that everyone is on the same page.
A partnership firm is simpler and has fewer formalities compared to a private limited company. However, in a partnership, partners are personally responsible for the business’s debts, while in a company, liability is limited to the amount invested.
Profits and losses are shared according to the terms in the partnership deed. It can be based on the investment each partner makes or an equal share, depending on what the partners agree on.
Yes, having a partnership deed is recommended, though it is not mandatory. However, it’s always better to have a formal agreement to avoid future disputes about roles, profit-sharing, and other important matters.
No, a partnership firm requires at least two partners. However, a single partner can operate a sole proprietorship, which is a different business structure.
No, a partnership firm cannot raise capital by issuing shares to the public. Instead, capital must come from the partners or through loans from banks or other financial institutions.
If a partner wants to leave, the partnership agreement should outline how the exit is handled. Typically, the firm may continue, and the departing partner’s share is either sold or distributed according to the partnership deed.
Yes, the ownership of a partnership firm can be transferred to another person, but it requires the agreement of all partners. The new partner will need to sign a new partnership deed.
Yes, a partnership firm can be converted into a private limited company. This involves legal paperwork and compliance with the Companies Act. The assets and liabilities of the partnership are transferred to the new company.
eTaxCart simplifies the entire process of registering a partnership firm by handling all the paperwork and compliance. Our experts ensure that your partnership deed is drafted correctly and registration is completed smoothly, saving you time and effort.
eTaxCart offers comprehensive support to ensure that your partnership firm complies with all legal requirements, including tax filings and annual returns. Our team handles everything, from registration to tax compliance, allowing you to focus on growing your business without worrying about paperwork.
