What is a partnership firm?

A partnership firm registration applies for a company with two or more people who agree to share a particular business's profit and loss. The partnership act has been prevalent in India since 1932. Most people opted for a partnership firm before the concept of LLP came in. A Partnership is easy to form, and compliance is minimal as compared to companies.

Types of Partnership Registration

According to the partnership Act 1932, there are two types of partnership registration

• Registered Partnership
• Unregistered partnership

According to this act, the registration of the partnership is optional. Even though there are no penalties, unregistered partnership firms have certain rights denied in Section 69 of the Partnership Act.

Difference between LLP and partnership

The LLP has come into action from the year 2009. Before that, small entrepreneurs opted for partnerships that had limited liabilities.

Here are some significant difference between LLP and partnership

Cost

The LLP registration costs slightly more as compared to the partnership registration. With Saral Bharat, you can get the best price no matter any business you choose to register.

The Authority

The LLP registration is registered under the ministry of corporate affairs, which comes under the state government. Partnership firms are authorized by the firm registrar and are controlled by their respective state government.

Protection

One added advantage of LLP is that the partners are not responsible for another partner's misconduct or negligence in this type of registration. LLP also provides limited liability of assets, which protects owners from loans and debts. But there is no such rule or clause when it comes to partnership.

Partners

Both the LLP and partnership requires a minimum of two partners. However, if one partner leaves the firm in a partnership, the complete registration gets dissolved. In the case of LLP, that's not the case. If one partner leaves, you can still find another partner to fill the position without the company getting dissolved.

Essential registration provided by Saral Bharat

Partnerships are an excellent choice for small enterprises where two or more persons decide to contribute to share the profits or losses.

Here is what you will get when you register your partnership firm:

• Certificate of Registration
• Current Account
• GST registration
• Online payment gateway
• PAN Application
• TAN Application
• MSME Registration
• FSSAI (If Required)
• Import Export Code

Documents required for partnership registration

To register a partnership firm, you need to provide certain mandatory documents. This includes a prescribed registration form for incorporation of a company, identity proof/address proof of Partners, certified a true copy of the Partnership deed entered into, and proof of the principal place of business.

You can submit any of the below-mentioned documents as address proof of partners.

• PAN Card
• Passport
• Drivers License
• Aadhar Card
• Voters ID

The registered address proof can be established by submitting the below-mentioned documents.

• Sale deed in case one of the Partner owns the place of business
• Rental agreement copy if the premises are rented
• Copy of latest electricity bill or water bill or property tax receipt

Advantages of registering a partnership business

Registering a partnership firm comes with certain advantages. Have a look.

Cost-Effective

The company registration of a partnership firm is very affordable if you do it with Saral Bharat. Keep focusing on your business without worrying about the budget.

Lesser compliance

There are minimal compliances when it comes to partnership. You don't need an auditor, nor do you need to file a GST.

Less time consuming

It takes around 2-4 business days to register a partnership firm. It also allows you to book lawsuits for the administration of rights under the partnership act.

Disadvantages of Proprietorship

Just so you know that we don't want to keep you in the dark, here are certain drawbacks that you might face with partnership registration. Read on...

• Partnership registration doesn't provide limited liability protection. So in case of any debts or loans, your assets will also be at stake in case you fail to pay the money back.
• You cannot approach any angel investors, venture capitalists, or private equity. Even banks and NBFCs prefer other business entities than a partnership.
• If one of the partners leaves for any reason, the whole company gets dissolved.

How much time will it take to register my business?

It usually takes 4 to 10 business days to register a partnership firm. But any discrepancy in documents can delay the process. So make sure you submit your documents correctly.

FAQ