Name Given to the Partnership Firm :
Any name can be given to a partnership firm as long as you fulfill the below-mentioned conditions:
The name shouldn’t be too similar or identical to an existing firm doing the same business,
The name shouldn’t contain words like emperor, crown, empress, empire or any other words which show sanction or approval of the government.
How should be the agreement between partners formed?
Partnership deed is an agreement between the partners in which rights, duties, profits shares and other obligations of each partner is mentioned.
Partnership deed can be written or oral, although it is always advisable to write a partnership deed to avoid any conflicts in the future.
Following details are required in a partnership deed:
A. General Details:
1. Name and address of the firm and all the partners
2. Nature of business
3. Date of starting of business Capital to be contributed by each partner
4. Capital to be contributed by each partner.
5. Profit/loss sharing ratio among the partners
B. Specific Details:
Apart from these, certain specific clauses may also be mentioned to avoid any conflict at a later stage:
1. Interest on capital invested, drawings by partners or any loans provided by partners to firm
2. Salaries, commissions or any other amount to be payable to partners
3. Rights of each partner, including additional rights to be enjoyed by the active partners
4. Duties and obligations of all partners
5. Adjustments or processes to be followed on account of retirement or death of a partner or dissolution of firm.
6. Other clauses as partners may decide by mutual discussion
Indian Partnership Act, 1932 governs the partnerships. Registration of partnership firm is optional and at the discretion of the partners.
Registration of partnership firm may be done at any time – before starting a business or anytime during the continuation of partnership.
It is always advisable to register the firm since a registered firms enjoy special rights which aren’t available to the unregistered firms.
How to register the partnership firm?
An application form along with fees is to be submitted to Registrar of Firms of the State in which firm is situated. The application has to be signed by all partners or their agents.
Documents to be submitted to Registrar are
If the registrar is satisfied with the documents, he will register the firm in Register of Firms and issue Certificate of Registration.
Register of Firms contains up-to-date information on all firms and can be viewed by anybody upon payment of certain fees.
Although partnership deed can be oral, generally a partnership deed is written to avoid any future conflict. Partnership deed is created on a judicial stamp paper of Rs. 2,000/- and has to be signed by all the partners. It contains rights and duties of the firm and the partners.
Documents of Partners
PAN card of partners – All partners are required to submit their PAN number as identity proof.
Address proof of partners – Partners can submit Aadhar Card, Driving License, passport or Voter ID card as address proof. Name and other details on address proof should match PAN card details.
Documents of Firm
PAN card of firm – Partners need to apply for PAN of the firm. Form 49A has to be filed to apply for a PAN. It should be filled online by visiting https://www.onlineservices.nsdl.com/paam/endUserRegisterContact.html
It can be filed online if the authorised partner signs the application using a digital signature certificate. Else, the application and requisite documents have to be sent to PAN processing centre, Pune.
Address Proof of firm – If the registered office place is rented, rent agreement and one utility bill (electricity bill, water bill, property tax bill, gas receipt etc.) have to be submitted. Also, NOC from landlord will be submitted.
If the registered office place is own, utility bill has to be submitted mentioning the name of the owner. Also, a NOC from the owner (owner as mentioned in utility bill) has to be submitted.
Additional Documents in case of Registration
In case partners wish to register the partnership firm, they need to submit partnership deed, ID and address proofs of the firm as well as the partners to the Registrar of Partnerships. With it, an affidavit is also required to be submitted certifying that all the details mentioned in deed and documents are correct.
For obtaining a GST registration, a firm needs to submit PAN number, address proof and identity & address proofs of partner. Authorised signatory will sign the application either using a digital signature certificate or E-Aadhar verification.
Current Bank Account
For opening a current bank account, a firm needs to submit following documents:
1. Partnership deed
2. Partnership firm PAN card
3. Address Proof of the partnership firm
4. Identity proofs of all the partners
5. Partnership registration certificate (if partnership has been registered)
6. Any registration document issued by central or state government (normally GST certificate is submitted)
7. Copy of electricity bill, telephone bill or water bill (not more than 3 months old)
8. Authorisation letter on the letterhead of the firm authorizing a partner as authorised signatory for the bank account.