A Partnership firm is a business entity created by persons who have agreed to share profits or loss of the business. This structure is thought to have lost its relevance since the introduction of the limited liability partnership (LLP) because the partners in a general partnership firm have unlimited liability, which means they are personally liable for the debts of the business. Also, the concept of LLP was introduced only in 2010, whereas the Partnership Act, 1932 has been in existence before the 1947 independence of India. Hence, partnership firms are the most prevalent type of business entity wherein a group of people are involved.

A partnership firm can be registered under Section 58 of the Indian Partnership Act. The registration of a partnership firm is done through the Registrar of Firm in which the partnership firm is situated. When the Registrar of Firms is satisfied that the provisions of Section 58 are complied with, a record of entry of the statement is made in the Register of Firms and Certificate of Registration is issued.

There are two types of Partnership, registered Partnership and unregistered Partnership. In terms of the Indian Partnership Act, 1932, (Act), the only criterion to commence business as a partnership is the finalization and execution of a Partnership Deed between the Partners. The Act does not require the Partnership Deed/Partnership Firm to be registered and in other words, does not require the Partnership Firm to be a registered Firm. Therefore, various partnership businesses exist as an unregistered firm.
There are no penalties for non-registration of a partnership firm, and a partnership firm can even be registered after formation. However, unregistered partnership firms have certain rights denied in Section 69 of the Partnership Act, which deals with the effects of non-registration of a partnership firm. Some of the disadvantages of an unregistered firm are:

1. A partner of an unregistered firm cannot file a suit in any court against the firm or other partners for the enforcement of any right arising from a contract or right conferred by the Partnership Act.
2. No suit to enforce a right arising from an agreement can be instituted in any Court by or on behalf of a firm against any third party unless the firm is registered.
3. An unregistered firm or any of its partners cannot claim set-off or other proceedings in a dispute with a third party.

Therefore, any partnership should be registered sooner or later.

The application for registration of Partnership Firm must contain the 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.

Advantages of a Partnership Firm

1. Minimal compliance requirements
2. Do not have to file annual returns with the RoC, but only Form ITR-5
3. Additionally, financial statements are not made publicly available granting them more privacy
4. Accounts need not get auditions
5. Partners can claim interest, salary, bonus, and commission paid to another partner as a deduction.

Disadvantages of a Partnership Firm

1. Partners cannot file a lawsuit against other partners
2. Cannot file lawsuits to enforce a contractual or conferred right
3. Moreover, it cannot file suits to enforce a right set by another court of law
4. Partners cannot file suits on behalf of a third-party
5. Cannot claim set-off in case there is a dispute with an external party

We can help you register a partnership firm anywhere in India in less than 7 working days. At the beginning Our team will brief you about the process and provide you with a list of documents required for registration. You can submit the documents to our email id. Once, the documents and information are verified, a partnership deed will be drafted and sent to the Partners. All the Partners must sign the document on stamp paper and upload a copy on the platform. Once, the signed partnership deed is available; Certificate of Registration of Partnership Firm is provided When it is registered with the concerned Registrar of Firms.