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Partnership Firm

Meaning of Partnership:-

A Partnership is defined under section 4 of Indian Partnership Act, 1932, as “the relations between persons who have agreed to share profits of the business carried on by all are any of them acting for all”.

Minimum requirement for forming partnership:-

Three minimum requirements to constitute a Partnership, viz:

  • There must be an agreement entered into orally or in writing by the persons who desire to form a Partnership,
  • The object of the agreement must be to share the profits of business intended to be carried on by the Partnership, and
  • The business must be carried on by all the partners or any of them acting for all of them.

Types of Partnership:-

A Partnership can be formed between:

(i) one or more individuals or

(ii) between an individual and a person representing a H.U.F. or

(iii) between an individual and other partner representing his firm, or between Limited Company or a Corporation and an Individual or Partnership firm, or

(iv) between two Partnership firms, or

(v) between a Limited Company or a Corporation and an individual or Partnership firm, or

(vi) between a Partnership firm and H.U.F., or

(vii) between members of HUF in their individual and independent capacity, and

(viii) between a HUF and a member of that HUF independently.

Documents required for Registration:-

The following documents are required for the registration of a Partnership firm:

1. Statement in Form 1 with the prescribed fees

2. Notarized True copy of the Partnership Deed stating the following :

  • The firm-name
  • The nature of business of the firm
  • The place or principal place of business of the firm
  • The names of any other places where the firm carries on business
  • The date when each partner joined the firm
  • The names in full and permanent addresses of the partners
  • The duration of the firm

3. Proof of ownership or rent/lease of the location of your business.(e.g. Electricity Bill/ Water Bill or Rent/Lease/Leave and Licence Agreement of Business Place)

4. Copy of PAN Card of partners

5. Copy of Aadhaar Card/ Voter identity card

The Statement must be signed by all the partners of the firm and must also be verified by affidavit in the prescribed manner.

Need for Partnership/ Consequences of non registration of gst:-

  • Partner Cannot sue firm: A partner in an unregistered partnership firm cannot sue the firm for enforcing any rights under the Indian Partnership Act, 1932.
  • Cannot claim Setoff in a dispute with a third party.
  • The firm cannot sue third parties whereas the third parties would be able to sue the firm irrespective of registration.