A partnership firm is a popular business structure where two or more individuals come together to run a business with a shared goal. The partners contribute capital, skills, and resources, and they share the profits and losses as per the agreed terms. Partnership firms are governed by the Indian Partnership Act, 1932, and are ideal for small and medium-sized businesses.
Registered Partnership Firm
A registered partnership firm is officially registered with the Registrar of Firms under the Indian Partnership Act, 1932.
Registration provides legal recognition, which helps in resolving disputes and enforcing the partnership agreement in court.
Unregistered or Notarized Partnership Firm
An unregistered firm operates based on a notarized partnership deed.
While this type is easier to set up, it lacks legal benefits like the ability to sue another partner or claim benefits in disputes.
Ease of Formation
Setting up a partnership firm is straightforward and cost-effective compared to other business structures.
Minimal Compliance Requirements
Unlike private limited companies, partnership firms face fewer compliance and regulatory requirements.
Shared Responsibility
The workload and financial risks are distributed among partners, reducing individual burdens.
Flexibility in Decision Making
Partners have the flexibility to make decisions without requiring extensive approvals or formalities.
Profit Sharing
Profits are divided among partners based on the agreed ratio, ensuring transparency and mutual benefit.
Unlimited Liability
Partners have unlimited liability, meaning their personal assets may be used to settle business debts.
Lack of Perpetual Existence
The firm dissolves in case of a partner’s death, insolvency, or withdrawal unless otherwise agreed.
Potential for Disputes
Differences in opinion can lead to conflicts among partners.
Limited Capital
Unlike companies, partnership firms have limited access to external funding sources.
To operate a partnership firm legally and efficiently in Delhi NCR, the following registrations may be required:
GST Registration
Mandatory for businesses with an annual turnover exceeding Rs. 20 lakhs (Rs. 10 lakhs for specific categories).
Trademark Registration
Protects your business name, logo, or brand identity from unauthorized use.
MSME Registration
Provides benefits such as subsidies, lower interest rates, and easier loan approvals under the Micro, Small, and Medium Enterprises Development Act.
IEC Registration (Import Export Code)
Required if your business is involved in import or export activities.
Professional Tax Registration
Mandatory in certain states for businesses employing salaried professionals.
Shops and Establishment Act Registration
Regulates working hours, employee rights, and business premises.
For setting up a partnership firm, you need to submit the following documents:
Partnership Deed
Clearly outlines the roles, responsibilities, and profit-sharing ratio of the partners.
PAN Card of Partners
Individual PAN cards for each partner.
Address Proof of Partners
Aadhar card, passport, or voter ID.
Business Address Proof
Utility bill, rent agreement, or property ownership documents.
Passport-sized Photographs
Recent photos of all partners.
Draft a partnership deed.
Obtain notarization or register with the Registrar of Firms.
Apply for PAN and TAN.
Open a business bank account.
Complete necessary registrations such as GST, MSME, and IEC based on your business needs.
Digitax Consultancy was founded on April 1, 2011, by Vishwa Jeet Dwivedi and Amit Kumar Jha, two visionaries with a passion for simplifying financial services.
