A partnership firm is a widely used business structure in India owing to its easy formation and less stringent compliance requirements. The Limited liability Partnership is an additional form of the said business structure. The procedure for registering a partnership firm in our nation differs from state to state.
In most scenarios, such changes come in the form of registration fees and the document required. To aid new businesses in initiating their business journey, in this write-up, we will unfold the process of registering a Partnership Firm in Gujarat.
What do you Mean by Partnership Firm?
A partnership firm is fundamentally a legal avenue formed when two or more individuals club together to kick starts a business journey based on a partnership deed. In this type of business form, all the partners held to get equal rights on profit or losses incurred by the business as per the pre-determined ratio.
The partnership firm registration comes under the regime of Section 4 of the Indian Partnership Act. But, this Act also states that registration is not mandatory in India. To operate as a partnership firm, the partners must register a Partnership Deed but have an alternative to leaving their business unregistered, though it is not recommended.
What is the Significance of the Partnership Deed?
The partnership deed acts as a legal ground for any partnership firm that underpins relevant procedures and rules that outline how the company will operate. Moreover, partners must opt for deed registration to avail legal status for their firm.
The partnership deed is nothing but a legal contract that encloses partners’ rights, duties, responsibilities & profit-sharing ratio. Apart from that, the deed also empowers the partners to avert disputes as it clearly mentions the role of individual partners.
Read our article:Description on Registration of Partnership Firm in India
What are the Possible Attributes of a Partnership Deed?
Go through the following list that encloses every viable detail that a partnership deed typically entails:
- Name & registered office address of the firm
- Information about the partners
- Timeline for the partnership
- Type of business and its nature of the operation
- Capital contribution of respective partners.
- Profit-sharing ratio
- Commencement date.
- Income (Salary and commission) reap by respective partners
- Roles & duties of the respective partner
- Interest levied the capital of each partner’s contribution
- Allocation of duties
- Procedure to include or terminate partners
- The process to follow in case a former partner retires or passes away
What is the Method for Selecting a Partnership Name?
Partners are free to select a unique & relevant name for their firm. This is typically the primary step in registering a partnership firm in India. While partners can opt for any name they deem fit, other requirements must be kept in mind.
The partners need to make sure that the selected name does not violate any existing trademarks or copyrights. As soon as the partners select the desired name, they must trademark it to avert outsiders from using the same name. Here are some basic requirements at what you need to remember before selecting a name for your firm.
- The name should not be an imitation of an existing name used by another firm.
- It should not adhere to similarity with the tagline or name of any other existing firm.
- The name must not reflect the terms like Empress, Crown, or Royalty.
- The name should be free from any terms that reflect a sense of endorsement by the government or a royal house.
Documents Needed for Registering a Partnership Firm in Gujarat
- Application regarding Partnership Registration via Form No. 1.
- Affidavit declaring the partner’s approval.
- Notarized & registered Partnership Deed approved by all partners via signature.
- Two digital photographs (passport size)
- Identification as well as address proof of all partners
- Aadhaar Card
- Sale Deed and rental agreement
- Latest phone/ /water/ electricity /gas bills/tax receipt
- NOC from the property’s owner.
- Acknowledgement slip regarding the fee payment
Procedure Regarding the Registration of Partnership Firm in Gujarat
Following are the instructions you need to follow for registering a Partnership Firm in Gujarat:-
- Select an appropriate name for the company, ensuring that it stays in line with the law mentioned above.
- Make sure to arrange the required supporting documents.
- Prepare a partnership deed on an affidavit/stamp paper worth at least Rs 500/.
- Fill the registration form viz Form 1 for partnership firms in Gujarat.
- Affix the supporting documents with the form as cited above.
- All the partners must approve the form with their signature and submit it ROF of Gujrat.
- After that, the authority will scrutinize the form for any potential errors. Once the authority gets satisfied, they will grant the Certificate of Registration to the partners within a week.
However, the partners should remember that the registration of partnership firms with the Registrar of Firm is different from registering for tax. To file income tax returns correctly, the firm must register with the Income Tax department and avail of a PAN card. Upon obtaining the PAN, they must open a current account in the designated bank in the name of the company.
Opening a Partnership firm will give you access to endless benefits that ensure the success of your business journey. After being registered, your firm will get a legal status that inherently add value to your firm and make it less vulnerable to stringent compliances.
Apart from that, a registered partnership firm does not have to confront trouble regarding the due diligence of their financial record as long as they stay within the revenue’s threshold limit. We hope that you will find it easy to register a Partnership Firm in Gujarat with the help of the above information. If you seek further clarification on the same, drop your queries in the comment section.