Partnership firm registration is required when two or more parties sign a formal agreement to manage and operate a business and share both the profits and losses.
Registering a Partnership is the right choice for small enterprises as the formation is straightforward and there are minimal regulatory compliances.
The Partnership Act has been in existence in India since 1932, making partnerships one of the oldest types of business entities in India. A partnership firm can even be registered after it is formed. There are as such no penalties for non Registration of a Partnership firm. But unregistered Partnership firms are denied certain rights under section 69 of the Partnership Act that majorly deals with the effects of non Registration of Partnership firms.
Documents Required For Partnership Registration
- PAN ( Permanent Account Number) of all Partners (Minimum 2)
- Address Proof ( Voter Id, Passport, Driving License, Aadhar Card) of all partners
- Latest passport size Photographs of all partners
- Registered Office Address Proof – Electricty Bill along with Rent Agreement / ownership proof of proposed registered office.
- Copy of Mobile bill, telephone bill, electricity bill or Bank Statement of all directors / promoters with Present address (could be different from permanent address).
Advantages of Forming a Partnership
- Tax advantages
- Simple operating structure
- Acquisition of capital
Disadvantages of Forming a Partnership
- Conflict with partners
- Authority of partners
- Unlimited liability
- Vulnerability to death or departure
- Limitations on transfer of ownership