This presentations will inform you about the partnership, its advantages & disadvantages, the way it is registered with registrar of firms and documents required for its registration .

1. SOLUTION TO YOUR ALL LEGAL HASSLES . . . . . ….
KRONUS LAW ASSOCIATES

2. How to form a
partnership
firm in India
?????

3. CONTENTS
What is partnership ?
What is deed of partnership?
Contents of partnership deed.
Advantages of partnership.
Disadvantages of partnership.
Registration of partnership.
Documents required for registration.

4. Before going into details that how a partnership firm is
formed we should know that what is a partnership.
Partnership is defined as a relation between two or
more persons who have agreed to share the profits
of a business carried on by all of them or any of them
acting for all. The owners of a partnership business
are individually known as the "partners" and
collectively as a "firm“.

5. A partnership is not a legal entity and cannot be
regarded as a person like a company. partnership is
the result of contract (deed of partnership). It is
created either by-
(i) express agreement, oral or written; or
(ii) conduct implication.
The rights of a partner are to manage, give opinion,
share profits and interest on capital under certain
cases, etc., Likewise, his/her duties are to work for
common advantage, remain faithful and render
accounts, and not to use partnership property for
personal interest.

6. A partnership may be created by a written document i.e. partnership
deed. To avoid unnecessary misunderstanding, harassment and
unpleasantness among the partners in the event of any dispute it is
suggested that partnership agreement should be jotted down in a
written instrument. The written instrument duly stamped and registered
is known as ‘Deed of partnership’. The law relating to a partnership firm
is contained in the Indian Partnership Act, 1932. Under Section 58 of the
Act, a firm may be registered at any time ( not merely at the time of its
formation but subsequently also ) by filing an application with the
Registrar of Firms of the area in which any place of business of the firm
is situated or proposed to be situated.
Now question arises that
what is partnership deed ??

7. The deed, generally contains the following particulars:-
Name of the firm.
1.Nature of the business to be carried out.
2.Names of the partners.
3.The town and the place where business will be carried on.
4.The amount of capital to be contributed by each partner.
5.Loans and advances by partners and the interest payable on them.
6.The amount of drawings by each partner and the rate of interest allowed thereon.
7.Duties and powers of each partner.
8.Any other terms and conditions to run the business.

8. Easy formation : Registration or incorporation is not required in case of partnership
firm like LLP or company. It can be formed without any legal formality and expenses.
Thus they are simple and economical to form.
Larger resources : Due to more number of partners the partnership firm has larger
resources for business operations as compared to sole proprietorship firm.
Flexibility in operation : Due to limited number of partners there is flexibility in the
operations of business as the partners can amend any objectives or change any
operations any time by mutual consent.
Better management : Business of a partnership firm is very well managed by all the
partners as they take interest in the daily affairs of business because of the ownership,
profit and control.
Sharing of risk : In partnership every partner bears the risk individually as it is easier
compared to sole proprietorship.
Advantages of partnership firm

9. Instability : A partnership firm does not exist for an indefinite period of time. The
death, insolvency or lunacy of a partner may lead to dissolution of the partnership firm.
Unlimited liability : Liability of every partner in a partnership firm is unlimited as any
of the partners may be called upon to pay all the debts even from its personal
properties. A single wrong decision by one partner can lead other partners in heavy
losses and liabilities.
Limited capital : Due to restriction on the maximum number of members, a limited
amount of capital can be raised.
No legal status : A partnership firm does not have a legal status like a Joint Status like
a LLP or company.
In a partnership firm it is not easy to transfer ownership. Consent of every partner is
required in order to transfer ownership.
Disadvantages of Partnership firm

10. REGISTRATION OF PARTNERSHIP
PARTNERSHIP FIRM IS REQUIRED TO BE REGISTERED UNDER SECTIONS
58 AND 59 OF THE PARTNERSHIP ACT, THOUGH IT IS NOT
COMPULSORY. THE PROCEDURE OF REGISTRATION OF PARTNERSHIP
FIRM IS AS FOLLOWS:
Under Section 58 of the Act: A firm may be registered at any time by
filing an application with the Registrar of Firms of the area in which any
place of business of the firm is situated or proposed to be situated.
Application can shall be signed and verified by all partners or their duly authorized
agents and shall be accompanied with prescribed fees and documents enlisted on next
slide.
Under Section 59 of the Act: When the Registrar of Firms is satisfied that
the provisions of section 58 have been duly complied with, he shall
record an entry of the statement in the Register of Firms and issue a
Certificate of Registration.

11. DOCUMENTS REQUIRED FOR PARTNERSHIP REGISTRATION
Application in Form 1
List of Partners with their details
Partnership Agreement
Pan Card, Identity Proof, Photo & Address Proof of the Partner (s)
Electricity Bill of the Premises where the registered office of the partnership
shall be situated.
No Objection from the owner of the premises where the registered office of
the partnership shall be situated.
Name of the firm should not contain any words which may express or imply the
approval or patronage of the government except where the government has
given its written consent for the use of such words as part of the firm’s name.

12. Beside registration of partnership firm there are some business licenses
you need to take when setting up your business as a partnership firm.
And these business licenses depend on the type of business you want to
do, number of employees you have hired and the state in which you
want to carry on business. For example it can be a product based or a
service based business.
Following are few licenses:
PAN card
TAN (tax collection and deduction account number)
Service tax registration
VAT(value added tax) registration
CST(central service tax) registration
Import Export code
EPF(employee provident fund) registration
ESI(employee state insurance) registration
Etc.

13. Prepared By Mani Karan Sharma, Advocate
TERMS OF USE
The content of this presentation is not legal advice or legal opinion and
should not be relied upon for individual situations. Legal counsel should
be consulted for legal planning and advice. No lawyer-client relationship
with Kronus Law Associates will be formed until you and the Firm have
signed an agreement.

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