Jammu and Kashmir Partnership Firm Registration
Jammu and Kashmir Partnership Firm Registration
In India, the two most leading forms of business organisations are the Partnership and Proprietorship firms. This is because the total number of statutory compliance required to set up these firms is less when compared to the number of statutory compliance required to set up a Limited Liability Partnership (LLP) or a company. A partnership firm is a business organization that is constituted by two or more individuals, abiding by the rules and regulations set in the Partnership Deed. In a firm, all partners can share the profits and the loss at an agreed rate. In this article, we look at the procedure for Jammu and Kashmir partnership firm registration.
Registration of Partnership Firms
The Indian Partnership Act, 1932 regulates all partnership firm registration. The act states that the registration of a partnership firm is not mandatory, and it is up to the members to register their firm. Partnership firms are registered before starting the business or anytime during the continuance of the firm. However, if a firm is not registered, it is denied to form certain benefits.
Need for Registration
The state’s Registrar of Firms (ROF) will have to register the partnership firm. By registering a firm, people can join to run the business and to continue with the legal bindings and share their profits according to their rules laid by them.
A business document for the partners where the rights and regulations of a firm are written is called a Partnership Deed. All partnership deeds have to be written since verbal partnership deeds cannot be used for taxation purposes. The following are the mandatory details that have to be mentioned in a partnership deed.
- Details of all the partners in a firm
- Nature of business of the firm
- Date of commencement of the firm
- Duration of Partnership
- The capital contribution made by each partner
- Profit and loss that has to be shared among the partners
Besides this, additional clauses in a deed are as follows.
- Interest on the Partner’s Capital, Partner’s Loan and interest have to be charged on the drawings.
- Salaries, commissions, etc. for the partners.
- Methods to prepare accounts and to make arrangements for audits.
- Divisions of tasks and responsibilities such as duties, powers and obligations of all partners.
Retirement, death and admission of a partner
When a partner retires, passes away or to add a new member, a partnership deed has to be created in a stamp paper with the Indian Stamp Act. Every new partner should possess a copy of the partnership deed.
The partners of a firm can choose any desired name for their firm. However, certain limitations have to be followed while selecting a name for a firm.
- The desired name should not be identical or sound similar to an already existing firm that runs a business that is more or like to an already existing business. This is to avoid any kind of confusion that affects the reputation of the firm.
- The proposed name should not contain terms like Crown, Emperor, Empress, Empire or terms that signifies sanctioning, approving or patronage of a government. In exemption cases, these terms can be used when the State Government permits the firm to use such names.
Benefits of Jammu and Kashmir Partnership Firm Registration
On registering the partnership firm can avail the following benefits.
Easy to Start
A partnership firm can be formed easily since there are no legal formalities required. Meanwhile, non-registered firms are not eligible to avail legal benefits.
A partnership firm can choose any name as long as it does not sound similar to an already existing firm. This is essential so that other company’s reputation does not get affected.
No Requirement of Annual Filing
An LLP or a company has to file their annual accounts with the Register of Companies every year, whereas, there is no requirement of this for a partnership firm.
To register a partnership firm, submit the following documents along with the application form:
- Form No. 1 application form
- Partnership deed signed by all the members
- An affidavit that states the partner’s intention to join the firm
- Rental or lease agreement of the property
Given below are the steps to register a partnership firm in Jammu and Kashmir.
Step 1: Duly fill the application form
The members of a partnership firm should obtain the Form-I.
Step 2: Attach the required documents
The applicant has to attach all the required documents along with the application form.
Step 3: Sign the application
On attaching the documents with the application, all the partners of the firm have to sign the application.
Step 4: Issuing the Certificate
The register after viewing the application makes the required changes and then enters in the Register of Firm’s log. Once all the procedures are completed, the concerned authority issues the Certificate of Registration.Form No.1 Application Form