A Partnership Firm is one of the most used business structures in India, and it is way much easier to establish, and the burden of compliance for a Partnership Firm is much lower than that of a company. Basically, a Partnership is an agreement between two or more parties or individuals to work together for a common goal. The Registration of Partnership Firm in Chennai can be attained when the company or organisation has a minimum of 2 people or individuals that are coming together to run the business on the terms that are decided.
Registration of a Partnership Firm in Chennai has required only two parties who agreed on a formal agreement to manage and run a business & share the profits & the losses. Partnership Registration is the best and most valuable option for small businesses or enterprises as the formation/establishment is very easy and the compliances are very less as compared to other entities. In this write-up, we will discuss the process to register a Partnership Firm in Chennai.
What are the Different Types of Partnership Registrations in Chennai?
Partnership Firms in Chennai can be categorised into two different types, and there are no penalties for not registering the Partnership Firms, but it’s always recommended to register a Partnership Firm in Chennai even before they are established. Following are the two types of Registrations:
- Unregistered Partnership Firm: Unregistered Partnership Firms in Chennai are not registered under the Partnership Act. They are also not available to get any benefits under the Income Tax Law.
- Registered Partnership Firm: This is regulated under the Indian Companies Act, 1932. A Registered Partnership Firm can sue the 3rd party under legal charges & also claim any set-offs.
Benefits of Registering a Partnership Firm in Chennai
Following are some benefits of registering a Partnership Firm in Chennai:
- Fund Raising: A Partnership Firm in Chennai can easily raise funds. As there are many partners, more contributions can be made among the partners. The registered Partnerships in Chennai can also avail of loans.
- Easy to Begin: Partnership Firms in Chennai are easy to set up as the only necessity for commencing a Partnership Firm in most instances is the Partnership Deed.
- Sense of Proprietorship: The firms’ activities are managed & owned by every Partner. The tasks may be varied; however, the Partnership Firms are united for a common cause. Ownership creates a high sense of responsibility which paves the way for an attentive workforce.
- Decision-Making: It’s an essential part of any company or organisation. The decision making is way faster in the Partnership Firms as there is no concept of passing any resolutions. Partners in firms enjoy a broad range of powers, and in most cases, they can also engage any transaction that is happening on behalf of the Partnership Firm with the Partner’s approval.
Register a Partnership Firm in Chennai – Procedure
Following is the step by step to registering a Partnership Firm in Chennai:
Step 1: Choosing the Firm’s Name: You have to ensure that the name of the Partnership Firm is distinctive and doesn’t match any present business entity. For this, you can visit the official website of the Ministry of Corporate Affairs. You can enter the selected firm name in the space provided & check if it has already been taken by another entity. You can also use this website to see if the name is safeguarded by a Trademark or domain name.
Step 2: Drafting Partnership Deed: It’s unique to every Partnership Firm, and you should always involve the services of professional experts while drafting Partnership Deed. Mainly, it should mention all the details as mentioned below:
- Full Name & address of the firm and its partners;
- Starting date of the business;
- The ratio of profit or loss sharing among the partners;
- The duties, rights, and obligations of the partners;
- The procedure to be followed on account of retirement or death of Partner (s);
- Capital contribution of each Partner;
- Salaries or commissions or other payables to the partners;
- The procedure or process to be followed in the event of the firm’s dissolution;
- Other clauses as mutually agreed upon by the partners.
Step 3: Partnership Deed Execution: Once the deed has been finalised, it must be executed (it should be signed by all the partners). Two witnesses should also sign the deed and also provide their respective addresses. And after that, stamp duty should be paid as per the amount prescribed by the relevant state. The Partnership Deed must be signed on non-judicial stamp paper/by franking.
Step 4: Prepare all the Documents:
- Application form for the Partnership Firm Registration online (Form 1);
- A certified copy of the Partnership Deed;
- Specimen of the affidavit, duly filled;
- As identity proof, submit PAN cards of all the partners;
- As address proof, submit Aadhaar card/voter ID card/passport/driving license of each of the partners;
- PAN card of the firm;
- In case of rented premises of offices, provide Rental Agreement and submit the latest utility bill of the registered office space.
- In the case of rental premises, a NOC (No Objection Certificate) from the landlord is also required;
- GST Registration Certificate in the firm’s name;
- Important details of the current bank account of the Partnership Firm.
Step 5: Registering the Firm: The RoF (Registrar of Firms), Government of Tamil Nadu, oversees the procedure of registering a Partnership Firm in Chennai. An application accompanying all the vital documents as mentioned above should be forwarded to the authority. Each of the partners should sign the application form. Further, must also submit the fees for registering a Partnership Firm in Chennai.
Step 6: Issuance of Registration Certificate: Once you submit the application form and make the payment, then the examiner will check the application and documents. On being satisfied, the authority will approve the Registration of the Partnership Firm in Chennai. The Registration Certificate will be issued and sent to the mail id of the firm. Moreover, from the Registration date, your firm will be eligible to enjoy all the benefits of a registered Partnership Firm.
As per the provisions of the Indian Partnership Act, 1932, Partnership Firm Registration is optional. Partners may or may not register their firm at their discretion. But, a registered firm enjoys various benefits that unregistered firms don’t.
Read our Article:PAN Card for Partnership Firm: How to get it with Ease?