Partnership firm registration
A partnership firm is a simple and low-cost way for two or more people to run a business together. Registration with the Registrar of Firms is optional but strongly advisable, because an unregistered firm cannot file suits to enforce its contracts. The partnership deed is the key document and should cover capital, profit sharing, roles and exit.
What this covers
- Drafting of the partnership deed
- Stamp duty and notarisation
- Registration with the Registrar of Firms, Maharashtra
- PAN, TAN and GST registration
- Amendments for admission or retirement of partners
- Conversion of a firm into an LLP
How the work is done
- Agree terms between partners
- Draft and execute the deed on stamp paper
- File for registration and obtain the certificate
- Complete tax registrations and open the bank account
Documents usually needed
- PAN, Aadhaar and photographs of partners
- Proof of the firm's place of business
- Signed partnership deed
Frequently asked questions
Is registering a partnership firm compulsory?
Not compulsory, but an unregistered firm cannot sue third parties or partners to enforce rights under contracts, so registration is recommended.
How is a partnership firm taxed?
A firm is taxed as a separate entity at a flat rate on its profits. Interest and remuneration paid to partners are deductible within the limits set by the Income-tax Act.
Can a partnership firm become an LLP?
Yes. A firm can be converted into an LLP under the LLP Act, carrying over its assets and liabilities.