A partnership firm is a business arrangement where two or more individuals join hands to run a business and share its profits or losses. It suits small and medium-sized businesses due to its ease of formation and minimal legal compliance.
While registration is not mandatory, it offers several advantages:
Grants formal recognition, improving trust with stakeholders.
Only registered firms can initiate legal action to enforce rights.
Enables conversion into LLP or private limited company easily.
Increased chances of approval for business loans and credit.
Registered firms can continue operations despite partner changes.
Ensure it is not similar to existing names or trademarks.
Draft an agreement with firm and partner details, business nature, capital, profit sharing ratio, and dispute resolution.
Print on non-judicial stamp paper and get it signed by all partners.
Submit Form 1, deed, affidavits, and address proofs to the Registrar of Firms.
Varies by state; based on firm’s capital.
Registrar issues the registration certificate after successful verification.