A partnership firm is a business in which two or more persons combine their capital for a common business and share the profits arising from it. Money, skills, or other resources are contributed by partners. Both partners share the risks of the business as well as the responsibilities. In a partnership, each member actively participates in running the firm. A partnership firm is not a separate legal entity like a company. The liabilities of the firm are the personal responsibility of its partners. This type of business organization is commonly found in sectors such as law and finance and small-scale industries.
A partnership firm is not a legal entity separate from its partners. That is, all debts and liabilities fall on the partners. There is an administration of the company’s operations through a document called the deed of partnership that defines the rights and duties attributed to each partner. It must be in the best interest of the partners to write out a deed so as not to wait for future disputes. All partners must be accorded equal rights unless the deed is exempt from it. Registration of the partnership firm is also optional but gives legal protection and helps in resolving conflicts between the partners.
Naming your partnership firm is indeed an important step that needs thoughtful consideration. Here are some key points:
- The name should be unique and should not bear any resemblance to other registered firms.
- Avoid names that are misleading or suggest any connection with the government.
- The name must not violate any existing trademarks.
- Choose the name that suits your business nature.
- Name should be in consonance with the provisions of the Indian Partnership Act 1932.
- And also verify if the desired name is available or not before confirming it for registration.
Consultation
It provides insight into the business requirements and the role of each partner to Sap Tax Hub LLP. It offers consultation with all the partners and points out their contribution, responsibility, profit-sharing ratio, and other vital terms.
Drafting of Deed
Sap Tax Hub LLP experts will draft the partnership deed with the information obtained from the consultation. These experts make sure that all legal requirements are covered, and that the deed is clear, lucid, and comprehensive. It will cover the name of the partnership, the nature of the business, the duration of the partnership, and the terms of adding or removing any partner.
Review and Revision
The draft deed is circulated among all the partners for review. Sap Tax Hub LLP believes in open-hearted discussion whereby feedback from the clients is welcomed to make sure that the document meets the expectations of all. In case any revisions are needed according to the inputs of the partners, the deed is revised accordingly.
Finalization and Registration
After the partners agree to the terms, the partnership deed gets finalized. Sap Tax Hub LLP helps register the partnership deed with the Registrar of Firms to ensure
smooth compliance with all legal formalities.
Partner firm registration in Delhi bears significance in many ways. Here are some of them.
- Legal recognition: rights can be enforced by a registered firm in the Court.
- Easy loan availability: The banks and other financial organizations will more easily advance the loans to such registered firms.
- Increased credibility for business: Its clients and suppliers will have more confidence in the firm.
- Tax advantages: Registered firms can offer some tax benefits.
- Resolution of disputes: A registered partnership firm safeguards its partners in case of any conflicts.
Generally, registration provides legal protection and makes the firm rise in confidence. Choosing a CA Firm in Delhi NCR for your partner firm registration can enhance these benefits even further.
You have certain eligibility criteria to fulfill before you register your partnership firm in Delhi. These are as follows:
- There should be at least two persons who would form the firm.
- All the partners should be Indian citizens.
- The partners would have to agree regarding profit and liability.
- There should be a registered office or a business address in Delhi with the firm.
- Business and the laws must be followed strictly.
It thus requires meeting the minimum eligibility requirements as a prelude to the registration process and avoids legal nuances later on. For guidance and assistance in this process, consider consulting the Best CA Firm in Delhi.
The Indian Partnership Act, 1932, is an enactment providing legal structure for the partnership firm in India. This enactment specifies what a partnership is, rights of partners, duties of partners, and how a partnership can be dissolved. The act keeps the activities of all such partnerships smooth and just. In addition, it guards the rights of each partner and offers legal redress in case of a dispute. The Act also states the implications if not registered and indeed emphasizes the need for transparency and honesty in between the partners. All partnership firms in India are to follow the Act.
When the firm is going to be registered in Delhi, the following checklist will be ensured completion:
- Draft and sign the deed of partnership that clearly delineates every role and responsibility of each partner.
- Obtain PAN cards of all partners.
- Provide proofs of address of the firm’s business location and of all the partners.
- File a copy of the partnership deed with the registrar of firms.
- Fill out Form A in the prescribed format and file along with registration fees.
- Affidavit by all partners stating no criminal background
All documents should be properly attested. This compilation will be useful at the registration desk. Sap Tax Hub LLP, as a prominent Chartered Accountant in Delhi, will help you to get rid of all these hassles by taking care of everything.
A partnership deed assumes extreme importance in defining the terms and conditions of the firm, including partners’ roles and responsibilities and profit-sharing ratios. The document does not lead to disputes because it clearly states the rights and duties of every partner. This document lays down a legal framework for the resolution of disputes, and business thus runs smoothly. A well-drafted partnership deed is the necessity for both legal and operational stability in any Chartered Accountant Firm in Delhi or for that matter, any other part of the country.
Normally, the working days taken by the Delhi partnership firm for registration will be about 7 to 10 days. In this case, the documents are submitted, and then they are duly verified by the Registrar of Firms, and finally the registration certificate is issued. But if there’s an error or deficiency in the application, the normal time taken may go overboard. All submitted documents must first be verified for accuracy before being presented to the relevant authority for processing. Online tracking options also allow one to track if the registration is happening as expected and address any problems encountered promptly.
The following documents are required for Sap Tax Hub LLP to form a partnership deed.
- Identity Proof: Copies of identity proof for all partners.
- Address Proof.
- Copies of address proof of all partners—utility bills, rental agreements, or bank statements.
- Business Details: The name, address, and nature of the business.
- Capital Contribution: Details of how much capital each partner is contributing to the partnership.
- Profit-Sharing Ratio: The profit-sharing ratios among the partners are agreed upon.
- Other Agreements: Any other agreements or terms which the partners want to add to the deed.
What are the fees for partnership firm registration in Delhi?
| PARTICULAR | FEES (INR) |
| Application Fee | ₹1,000 – ₹1,500 |
| Stamp Duty | ₹500 – ₹1,500 |
| Notary Charges | ₹500 – ₹1,000 |
| Legal Consultation Charges | ₹2,500 – ₹5,000 |
| Deed Drafting Charges | ₹1,000 – ₹3,000 |
| Government Processing Fee | ₹200 – ₹500 |
| PAN/TAN Registration Fee | ₹200 – ₹500 each |
| GST Registration (Optional) | ₹500 – ₹1,500 |
| Total Estimated Cost | ₹6,400 – ₹14,500 |
