The term “partnership” refers to the association of two or more people to carry out a particular business activity. The Indian Partnership Act of 1932 defines partnership as the association of two or more individuals who have consented to share the profit generated by a business conducted by all or any of them acting for all. This definition applies to the corporate system.
A person faces limitations in their ability to carry out business activities in a corporate structure like a proprietary business, as well as liability that can arise at any time. Because there are fewer legal ramifications, this business structure is suitable for any small or medium-sized business.
According to the Act, registration of a partnership firm is not required, but registering a business gives the partnership a legal identity. It assists in dispute resolution and claims settlement against third parties. Learn how to register a partnership company in India in this blog.
Partnership firm registration process
The government has been able to create a digital version of the registration and compliance requirements for business owners thanks to the growing use of technology. Even though offline registration is still in use in India, only a few regions have completely automated the manual registration process.
At the moment, applicants for Partnership firm registration in Bangalore can submit an online application rather than a paper one to the Registrar of Firms (ROF). You can register a partnership firm online by following the steps below.
Choose name
A business ought to pick a name for Partnership firm registration in Bangalore that does not:
- The name should not be too similar to another company that does the same thing.
- The name should not include words like “emperor,” “crown,” “empress,” “empire,” or any other word that suggests government approval or sanction.
Draft the deed
The partnership deed is the most important document for Partnership firm registration in Bangalore because it gives the registrar all the information it needs:
- The name and address of the company and all partners
- Their contact information The nature of the business
- The duration of the partnership
- The profit/loss sharing ratio
- The rules governing the firm’s solvency
- The amount of capital each partner will contribute
- In addition, the Deed should include information about the partners’ responsibilities, audit procedures, and other details.
Apply for a PAN card in the name of the partnership firm
Regardless of whether a company is registered under the Partnership Act, it must apply to the Income Tax Department for a Permanent Account Number.
A current account in the company’s name can be used to apply for this. To fulfil your obligation to pay taxes, you must have a PAN.
File registration application
A company must provide information on its name, the nature of its business, its address, the names and addresses of all partners, and the date it started trading on the registration application.
Documents submission
The following documents must be submitted to the Registrar in addition to the application as part of the process for Partnership firm registration in Bangalore:
- Application for registration of a partnership (Form 1),
- a certified original copy of the partnership deed,
- a specimen of an affidavit,
- For Partnership firm registration in Bangalore a PAN card in the name of the partnership firm,
- proof of the partnership firm’s address,
- Ownership deeds, lease and rent agreements, and other relevant documents are commonly acceptable documents, including PAN cards and proofs of each partner’s address.
Payment of fees and stamp duties
At the time of submitting the documents to the Registrar, both the registration fee and the stamp duty must be paid. The costs differ by state. The Partnership firm registration in Bangalore will not be completed if the dues are not paid.
Finalize the deed
Each partner should be given a signed copy of the deed on stamp paper to make it legal. A single stamp paper deed should be properly signed by all partners in front of the notary.
The stamp’s value varies from state to state. During the process of Partnership firm registration in Bangalore, the signed copy is provided to the Registrar.
Certification from registrar
After thoroughly reviewing the documents, the registrar will issue a registration certificate after the Partnership firm registration in Bangalore.
- The company will then be listed in the Register of Firms.
- The company will be considered registered as of this date. From the date of registration, the partnership company is required to add “(Registered)” after its name.
Types of Partners in a Partnership firm
Following are the types of partners in the firm that has Partnership firm registration in Bangalore.
- Active or working partner
- Dormant or sleeping partner
- LLP
- General partnership
- Nominal partner
- Partner in profits only
- Partner by estoppel or holding out.
Advantages of Partnership firm
After having Partnership firm registration in Bangalore, the following advantages are obtained.
Easy Formation
Partnerships, like sole proprietorships, do not require formal legal documents to be established. In contrast to joint stock companies, there are no formal documents to be prepared.
To enter into a partnership and to have Partnership firm registration in Bangalore, either a verbal or written agreement is required. Even registering a partnership is not required.
Conversion
After having Partnership firm registration in Bangalore, you can convert your partnership into a private limited company at any time. Converting to a private limited company or any other type of business entity requires specific steps.
Flexibility
Since there are no legal restrictions on the business’s activities, it is extremely mobile and adaptable. Also, the firm having Partnership firm registration in Bangalore has flexibility.
To accommodate the altered circumstances, the partners are free to implement any modification they deem desirable. Hence Partnership firm registration in Bangalore is important.
Combined skills
The partners’ expertise, experience, and skills are advantageous to the partnership model of business.
Because everything is decided jointly, partnerships have an advantage over sole proprietorships in this regard. Hence Partnership firm registration in Bangalore is important.
Power to decide
Because of the close connections between the partners, it is easier to make quick decisions, which makes it easier to take advantage of unexpected opportunities.
Making decisions in a partnership firm that has Partnership firm registration in Bangalore can be very effective if you have a lot of information and multiple points of view.
Risk sharing
The benefit of this arrangement is that each partner will be responsible for a much smaller portion of the company’s losses; whereas the sole proprietor will be responsible for the entire loss of the business. Thus Partnership firm registration in Bangalore is important.
Maintaining secrecy
The business can be kept private by partnership firm partners. Nothing about a business is kept a secret.
As opposed to a joint stock company, a partnership firm that has Partnership firm registration in Bangalore is not expected to have its accounts audited and published.
This is a distinct advantage that partnerships have over joint stock companies.
Relationship between reward and work
Reward and work are directly linked in the partnership model of a business organization. The partners can work harder and make more money as a result. They will gain more benefits the more they work. So Partnership firm registration in Bangalore is crucial.
Wholesome effect
The fact that each partner’s liability is unlimited when Partnership firm registration in Bangalore is done. And that each partner is responsible for his or her entire private fortune serves as a strong deterrent against careless speculation.
Easy to dissolve
When compared to registered businesses, the dissolution of a partnership is straightforward. In the event of a partner’s death or bankruptcy, it can be dissolved.
After a full year has passed, a private limited company cannot be closed, and closing one takes more than a year. Dissolution makes it simple to end a partnership.
Recent news on MCA
The MCA has decided to extend the deadline for submitting 45 electronic forms due between February 7, 2023, and February 28, 2023, to March 31, 2023, without charging any additional fees.
As a result of changes to the way e-forms are filed in MCA 21 Version-3, MCA has taken into account a variety of representations from stakeholders seeking relief. These representations include a new process for user registration as well as the stabilization of 45 e-forms that went live on January 23, 2023. These timelines were previously extended by MCA in General Circulars 1/2023 and 3/2023.
In addition, Form PAS-03, which was made available for filing in MCA21 Version-2 on January 20, 2023, and was made available in MCA21 Version-3 on January 23, 2023, and whose due dates are between January 20, 2023, and February 28, 2023, can be filed without incurring additional fees up until March 31, 2023.
Additionally, the reservation period for names reserved following section 4(5) of the Companies Act of 2013 has been extended by twenty days. Following Rule 9 of the Companies (Incorporation) Rules, 2014, the resubmission period is also extended by 15 days to the date between January 23, 2023, and February 28, 2023.
45 e-Forms from MCA are free for an additional 15 days (Transition to V3).
Due to changes in the filing process in MCA 21 Version-3, which include a new process for user registration, among other things, MCA has decided to grant stakeholders an additional 15-day extension to file 45 company forms and PAS-03 without charging additional fees after taking into account a variety of representations.
MCA 21 Version 3.0 is stabilizing 45 forms that were released on January 23, 2023. This 15-day extension is in addition to an earlier 15-day extension that was announced in MCA General Circular 1/2023 on January 9, 2023.
Additionally, Form PAS-03, which was closed for filing on January 20, 2023, and launched on January 23, 2023, can be filed without incurring additional fees for 15 days. This is because Version-2 was closed for filing on January 20, 2023, and Version-3 was launched on January 23, 2023.
45 e-Forms free of charge for 15 days (Transition to V3): 1/2023 General MCA Circular
In cases where the due dates for filing 45 e-Forms, as listed below, fall between 07/01/2023 and 22/01/2023, when the MCA21 Portal transitions from V2 to V3, MCA has granted an extension of 15 days without charging any additional fees.
Due to the ongoing process of introducing these forms in MCA21 Portal Version 3.0, MCA has decided to waive the additional fee for 45 e-forms for 15 days. Additionally, these e-forms will not be available for e-filing in MCA21 Portal Version-2 from 07/01/2023 to 22/01/2023.
The above-said information is for the recent update in MCA regarding the extension of the timeline.
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