Q1. What is a Partnership Firm?
Ans: A partnership firm is a type of business structure in which 2 or more persons manage the business as per the partnership agreement.
Partnership firms are created as per the terms and conditions contained in the partnership deed. It is relatively easy to start as compared to a corporate form of organization. Partnership deed registration is not compulsory but its registration will be beneficial for business. So registered partnership deed is necessary for business and loan purposes.
Q2. What is Partnership Registration?
Ans:- Partnership registration means the registration of the partnership firm by its partners with the Registrar of Firms. The partners should register their firm with the Registrar of Firms of the state where the firm is located. Registration of partnership is not compulsory in India but as per the Partnership Act, there is a written agreement of partnership which is called a partnership deed. It means registration of partnership is optional in India. It is a contract between two or more individuals who decide to manage and operate a business together for profit-making.
For partnership registration, two or more people must come together as partners, agree on a firm name, and enter into a partnership deed. However, partners cannot be members of a Hindu Undivided Family or husband and wife.
Q3. What is the eligibility for Partnership Registration?
Ans: The following are the eligibility for Partnership registration:-
Minimum person requirement
A minimum of 2 people are required to create a partnership firm in India and those 2 same person can become partner.
Minimum capital requirement
The capital of the business depends on the need of the business and statutory no minimum capital is required to start the partnership firm.
Unique Name
The name of the partnership firm should be unique and should not be similar to any existing partnership firm, LLP, company, or trademark.
Q4. What are the documents required for Partnership registration?
Ans:- The following are the documents required for Partnership registration:-
Identity Proof (Partners)
- Photograph of all the partners
- PAN card of all the partners
- ID proof of all the partners (Driving License/Passport/Voter ID) (anyone)
Address Proof (Partners)
- Address Proof of All Partners (Aadhar/Passport/Voter ID) (anyone)
Proof of Registered Office
- Sale Deed in case the Partner owns the place
- Electricity Bill or any other utility bill for the address proof of the Registered Office
- Rent agreement copy if the office is on a rental basis
Q5. What is the procedure for Partnership Firm registration?
- Step 1: Drafting of Partnership Deed
- Step 2: Execution of Partnership Deed
- Step 3: Partnership Deed Registration
- Step 4: Get a partnership firm registration certificate
- Step 5: Get the PAN of the partnership firm
- Step 6: Open the bank account of the partnership firm
Q6. What are the benefits of Partnership registration?
Ans: The following are the benefits of partnership registration:-
Easy to form
The Partnership firm is easy to form and it is created by the creation of the partnership deed. Partnership firm registration is not mandatory and there is no requirement of annual filing. Only income-tax returns are required to be filed when required.
No minimum capital
There is no minimum capital requirement for starting the partnership firm.
Large resource pooling
There are large resource pooling capacity to partnership firm because of 2 or more partners requirement, as compared to proprietorship firm.
Risk sharing
Profit sharing and loss sharing of partnership firm are shared between partners.
Scalable
New partners can be inducted, retired or removed. so it is scalable as per the requirement.
Q7. Can we form the Partnership without the Partnership deed?
Ans:- Yes, however practically partnership deed is required as it is required to be given to the Income tax authority, bank etc.
Q8. What is ‘Partnership’, ‘Partner’, ‘Firm’ & ‘Firm Name’?
Ans:- Partnership” is the relation between persons who have agreed to share the profits of a business carried on by all or any of them acting for all.
Persons who have entered into partnership with one another are called individually, “partners” or business partner and collectively “a firm”, and the name under which their business is carried on is called the “firm-name”.
Q9. Does Partnership created by status?
Ans:- The relation of partnership firm arises from contract and not from status; and, in particular, the members of a Hindu undivided family carrying on a family business as such, or a Burmese Buddhist husband and wife carrying on business as such are not partners in such business.
Q10. What is mode of determining existence of partnership?
Ans:- In determining whether a group of persons is or is not a firm, or whether a person is or is not a partner in a firm, regard shall be had to the real relation between the parties, as shown by all relevant facts taken together.
Q11. What is “Partnership at will”
Ans:- Where no provision is made by contract between the partners for the duration of their partnership, or for the determination of their partnership, the partnership is “partnership-at-will”.
Q12. What is “Particular Partnership” concept?
Ans:- A person may become a partner with another person in particular adventures or undertakings.
Q13. Is partnership firm registration mandatory?
Ans:- No, However, unless a partnership firm registration is not done with the registrar of firms and societies, the rights of the partners inter se or against strangers cannot be enforced in a court of law, If the partnership deed itself creates, transfers or affects an interest in immovable property. So partnership deed registration will be beneficial.
Q14. What are general duties of partners?
Ans:- Partners are bound to carry on the business of the firm to greatest common advantage, to be just and faithful to each other, and to render true accounts and full information of all things affecting the firm to any partner, his heir or legal representative.
Q15. When partnership firm shall be deemed to be registered?
Ans:- When the Registrar is satisfied that the provisions of section 58 have been duly complied with, he shall record an entry of the statement in a register called the Register of Firms, and shall file the statement. On the date such entry is recorded and such statement is filed, the firm shall be deemed to be registered.
The firm, which is registered, shall use the brackets and word (Registered) immediately after its name.
Q16. How to record alterations in firm-name, nature of business and principal place of business?
Ans:- In following ways alterations are recorded:-
(1) When an alteration is made in the firm name or in the nature of business of a firm or in the location of the principal place of business of a registered firm, a statement shall be sent to the Registrar, within a period of 90 days from the date of making such alteration, accompanied by the prescribed fee, specifying the alteration and signed and verified in the manner required under section 58.
(2) When the Registrar is satisfied that the provisions of sub-section (1) have been duly complied with, he shall amend the entry relating to the firm in the Register of Firms in accordance with the statement, and shall file it alongwith the statement relating to the firm filed under section 59.
Q17. Can Partnerhip firm registration online, be done?
Few states India are providing partnership firm registration online. However, in other states partnership firm registration online or partnership deed registration online, is not adopted. To register partnership firm online can be possible only in that state which provides online registration services. So partnership registration online or partnership deed registration online, can be done by indilegalonline for those states where partnership registration online is possible.
Q18. What is Partnership deed?
Partnership deed is a written legal document that contains an agreement made between two or more individuals or legal person, who have the intention of doing business with each other and share profits and losses. It is also called a partnership agreement.
Q19. Who are Business Partner or Partner?
Business partner includes any contractual, exclusive bond between parties that represents a commercial alliance. The two parties may be individuals who agree to work together to create and manage a business.
Alternatively, it may be a very loose arrangement designed largely to impress customers and competitors with the size of the network that the business partners belong to.
Q20. Is registration of a partnership firm is compulsory or not?
The registration of partnership is not compulsory and is at the discretion of the partners whether they want to register the partnership firm or not. But a partnership firm cannot avail legal benefits if it is not registered, hence it is always advisable to register it.
Q21. What is partnership firm registration process in India/How Does One Register a Partnership Firm in India/What is procedure for partnership firm?
Ans:- Following are the partnership firm registration process in India:-
(1) The registration of partnership firm is effected by sending by post or delivering to the Registrar of the area in which any place of business of the firm is situated or proposed to be situated, a statement in the prescribed form and accompanied by the prescribed fee and a true copy of the deed of partnership. The statement shall be signed by all the partners, or by their agents specially
authorised in this behalf.
(2) When the Registrar is satisfied that the provisions for registration have been duly complied with, he shall record an entry of the statement in a register called the Register of Firms, and shall file the statement. On the date such entry is recorded and such statement is filed, the firm shall be deemed to be registered.
(3) The firm, which is registered, shall use the brackets and word (Registered) immediately after its name.
Q22. What is partnership firm registration fees?
Ans:- Partnership registration is subject matter of state in India. So partnership firm registration/partnership deed registration fees vary from state to sate according to their stamp duty rules. Here’s a list of the total cost of registration of partnership deed for each state depending on the capital invested by the Partners:-
Q23. What are drawback of unregistered partnership firm in India?
Ans:- As per section 69 following are consequences for unregisterd partnership firm in India:-
(1) No suit to enforce a right arising from a contract or conferred by this Act shall be instituted in any court by or on a behalf of any persons suing as a partner in a firm against the firm or any person alleged to be or to have been a partner in the firm unless the firm is registered and the person suing is or has been shown in the Register of Firms as a partner in the firm. The requirement of registration of firm shall not apply to the suits or proceedings instituted by the heirs or legal representatives of the deceased partner of a firm for accounts of the firm or to realise the property of the firm.
(2) No suit to enforce a right arising from a contract shall be instituted in any court by or on behalf of a firm against any third party unless the firm is registered and the persons suing are or have been shown in the Register of Firms as partners in the firm.
(3) No suit to enforce any right for the dissolution of a firm or for accounts of a dissolved firm or any right or power to realise the property of a dissolved firm shall be instituted in any court by or on behalf of any person suing as a partner in a firm against the firm or any person alleged to be or have been a partner in the firm, unless the firm is registered and the person suing is or has been shown in the Register of Firms as a partner in the firm. However, the requirement of registration of firm shall not apply to the suits or proceedings instituted by the heirs or legal representatives of the deceased partner of a firm for accounts of a dissolved firm or to realise the property of a dissolved firm.
Q24. What are the benefits of registered partnership deed?
Ans:- Following are the benefit of registered partnership deed or partnership firm registation in India:-
(1) Potential to sue the firm or sue the other partners
(2) The capacity of the firm to sue third parties
(3) Right to use the principle of set-Off
(4) Better credibility
(5) Ability to convert into an entity
Q25. What are partnership registration form/partnership firm registration form, in India?
Ans:- Partnership Act 1932 is a central Act, but rule making power are lying with states. So each state make rules for their terrirtory. Normally, Form I is prescribed for filing application for partnership company registration.
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