Partnership Firm Registration and Services in Mumbai

Partnership Firm

A partnership is when two or more people agree to share the profits of a business they run together.

This requires three things:

an agreement between the individuals,
an agreement to share profits, and
the business being run by one or all of the individuals.

These are the essential elements of a partnership as stated in Section 4 of the Indian Partnership Act.

Documents Required

Pan Card of Partners
Aadhar Card of Partners
Rental Agreement
Electricity Bill
NOC from Landlord

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Features	Proprietorship	Partnership	LLP	Company
Definition	An unincorporated business managed by a single individual who has unlimited personal liability for the business’s debts and obligations.	A legally binding agreement between two or more parties to jointly own and manage a business, sharing the profits and losses as per the agreed terms.	A Limited Liability Partnership is a type of business entity where partners have limited liability for the company’s debts and obligations. It has a legal personality separate from its partners, but is managed by them.	A legally recognized business entity that is separate from its owners/shareholders and has limited liability. It can be either privately or publicly owned, and can have a board of directors to manage the business.
Ownership	Sole ownership	Min 2 Partners Max 50 Partners	Designated partners	Min 2 Directors Min 2 Shareholders Max 15 Directors Max 200 Shareholders For One Person Company 1 Director 1 Nominee Director
Registration Time	7-9 working days
Promoter Liability	Unlimited Liability		Limited liability
Documentation	MSME GST Registration	Partnership deed	LLP Deed Incorporation Certificate	MOA AOA Incorporation certificate
Governance	-	Under Partnership Act	LLP Act 2008	Under Companies Act,2013
Transferability	Non Transferable	Transferable if registered under ROF	Transferable
Compliance Requirements	Income tax filing if turnover is more than Rs.2.5 lakhs	ITR 5	Form 11 Form 8 ITR 5	ITR 6 MCA filing Auditor’s app

Partnership Firm Registration FAQ's

The members can extend anywhere from 2-20.

Only a verified Indian citizen is eligible to partner in a partnership firm.

However, non-residents with Indian origin can invest in a partnership with government approval

Documents required for a partnership firm registration:

PAN Card
Identity proof
Address proof
Draft of the partship feed signed and gratified by all the partners.

The owners are given a free hand on investments with no minimum slabs.

Registering a partnership firm is highly recommended because only a registered partnership firm can file a lawsuit in any court against any partner or firm to enforce their rights under the Partnership Act.

Additionally, a registered partnership firm is the only one eligible to claim set-off or other proceedings in a dispute with a party.

Partnership firms and partners are considered the same legally. The partners have unlimited liability and are jointly and severally liable for the firm’s debts. Therefore, a Partnership firm does not have a separate legal existence.

Indeed it is mandatory for such a firm to file the income tax returns irrespective of the profit or losses incurred.

In order to transfer the ownership interest in a partnership firm, consent from each partner must be taken into consideration.

The Partnership deed outlines the terms and conditions of the Partnership and is a crucial document as it regulates the rights and duties of each partner.

A Partner cannot transfer their interest in the Partnership Firm without the consent of all other partners.

It is not mandatory for Partnerships to prepare audited financial statements every year, but a tax audit may be required based on turnover and other criteria.

Yes, a Partnership firm can be converted into a Company or LLP, but the process is complicated and time-consuming. It is advisable to consider starting an LLP or Company instead.

To open a bank account for a Partnership firm a registered Partnership deed along with an identity proof and address proof of the Partner is to be provided.

Partnership