Karnataka Partnership Firm Registration
Karnataka Partnership Firm Registration
Partnership firms are the most favoured forms of the business constitution that are owned, controlled and administered by a group of people for profit. Partnership firm is the second most popular type of business entity in our country after proprietorship. Under the provision of Karnataka Partnership (Registration of Firms) Rules, 1954 a partnership firm can be registered at any time by applying with the District Registrar Office, Department of Stamps & Registration, Karnataka. In this article, we look at the guidelines for Karnataka partnership firm registration in detail.
In case you require assistance for registering Partnership Firm in Karnataka, get in touch with an Indiafilings Advisor at [email protected]
Benefits of Partnership Firm
It is not obligatory to register a Partnership firm; however, it is preferable to register Partnership firm due to the added advantages. Some of the importance of recording partnership firm in Karnataka is explained in detail here.
- One of the important benefits of partnership firms is that two or more persons can run and share the profits.
- Partnership firms can be registered very quickly when Compare with LLP (Limited Liability Partnership), because firm registration does not require DIN, Name Approval and getting DSC.
- LLP registration lays down the Central Government (Ministry of Corporate Affairs) while State Governments law governs the Partnership firm registration.
Know more about LLP Vs Partnership firm
Karnataka Partnership (Registration of Firms) Rules, 1954
As per the rules of Karnataka Partnership (Registration of Firms) Rules, 1954 Partnership firm is an organisation of two or more persons managed by all of them with the intention to run business and share the profits. Partnership Firm registration need to be done in the concerned District Registrar office where the firm is situated or proposed to be located.
Note: The firm can be registered at any time not only at the time of formation by eventually applying with the District Registrar office.
- There must be two persons to form a partnership firm. If the firm is intended for financial transactions maximum of 10 and for other purposes a maximum of 20 persons can establish a firm
- A partnership firm may be for any definite or indefinite duration.
Effects of Non-Registration of Firm
It is not obligatory for registering a Partnership firm; however, it is preferable to record a Partnership firm due to the added benefits. If a partnership firm not registered it will lead to the following consequences:
- A partnership firm cannot file a suit against the third party
- No partner of the firm can file a lawsuit against other partners of that firm.
- The partnership firm cannot file a suit against any of the partner.
- A partnership firm cannot use the third party in the court of law for the enforcement of its right
- A partnership firm cannot claim setoff
Before Registering Firm
Before registering the partnership firm, the applicant has to verify that the proposed name for the firm with an existing firm or company name or trademark or LLP name. If the two partnership firms are registered with a similar name, it will lead to legal hassles in the future. Hence, it’s very crucial to do a name availability check and trademark search before registering the partnership firm.
Admissible Name for Firm
After finishing the name availability check and trademark search, the applicant has to contemplate following rules for selecting partnership firm name.
- Name of the partnership firm must not be similar or too identical to the name of an existing company/firm doing the related business.
- If the names of firms are similar, lead to indecision.
- The reputation of the new firm may be injured, if the firm could adopt an allied name.
- According to Section 58(3) of Indian Partnership Act, 1932, the name of the partnership firm should not contain words like Crown, Emperor, Empire, Imperial, Empress, King, Queen, Royal or words which communicating or inferring the endorse, endorsement or support of Government or words expressing the sanction, approval or patronage of Government.
Create a Partnership Deed
Partnership deed is one of the legal documents which provide the details of the rights and obligations of the members/partners of the partnership firm. As per the Indian Stamp Act, the partnership deed should be on a stamp paper and registered in Sub Registry Office. Following attributes are essential for partnership deed.
- Name and Address of the firm
- Name and Address of all partners
- Date of Commencement of business
- Nature of business to be carried on
- Duration of Partnership
- Profit sharing ratio among the partners
- Capital contribution from each partner
Note: On the addition to the requirements as mentioned above, the partners may point out any extra clauses if they wish to include in the deed.
While registering the partnership firm, a partnership deed should also be filed with the Sub Registry Office. All partners should have a copy of the partnership deed.
Following documents have to be furnished for registering a partnership firm in Karnataka.
- Registered Partnership Deed
- Up-to-date License, Approvals or Permits (as applicable)
- Aadhaar, PAN Card, Voter ID of all the partners
- Blank non-judicial stamp paper of requisite denomination purchased by the firm with blank semi papers. (2 Nos.)
- Registered land lease deed to establish the address of the principal place of business or any other areas where the firm carries on Business.
Applicable Fee for Registration
- Stamp duty of Rs.100 has to be paid if the capital of the firm does not exceed Rs.500
- Stamp duty of Rs.500 has to be paid if the capital of the firm exceeds Rs.500.
Partnership Firm registration will be done within fifteen days from the date of application.
Procedure to Register a Partnership Firm – Offline
Guidelines for registering partnership firm in Karnataka are explained in step by step procedure here.
Step 1: Provide following details in the Partnership firm registration application.
- The firm name
- The principal place of business of the partnership firm
- The date when each partner joined the firm
- Details of any other places where the partnership firm carries on business
- The duration of the firm
- The names and permanent address of the partners
Note: Application needs to be signed by all partners of the firm or by their agents especially authorised in this behalf.
Step 2: The registration of a firm can be done at any time by submitting the duly filled application form along with supporting documents to the concerned District Registrar Office where a firm is situated or proposed to be located.
Step 3: On submission of the secure application, a letter will be issued by the competent authority with seven working days intimating about any modification required in the application form or document to be submitted.
Note: The necessary modification needs to be made by the applicant within next seven days failing which the application may be summarily rejected.
The date for inspection will be intimated by on submission of complete, correct application form with all the required documents.
Step 4: All the original documents have to be produced on a scheduled date for inspection at the District Registrar Office.
Step 5: If the Registrar is satisfied with the points stated in the partnership deed and application form, the authority will record an entry of the statement in a register called the Karnataka Register of Firms and issued an Acknowledgement as a proof for Registration.
Procedure to Register a Partnership Firm – Online
The Department of Stamps & Registration, Government of Karnataka facilitates its citizen to enter details and book appointment for registering partnership firm online.
Step 1: Access home page of KAVERI, for register yourself under this portal click on Register as New User’ option.
Step 2: The user registration page appears. Provide the required details and enter the captcha and click on Register button.
Login to the Portal
Step 3: Provide the login id and password, by clicking on login portal you will be redirected to the new page.
Provide Details and Take appointment
Step 4: Provide all details related to the firm and click on save. The application will be forwarded online to DRO. After entering all information, you can select a convenient time slot for visiting District Sub-Registrar office.
Step 5: After selecting a time slot, acknowledge slip will be displayed. Take a print out this.
Approach DSR office
Step 6: Visit registrar office along with all original documents, applicable fee and acknowledgement slip.
Step 7: After verification, if the Registrar is satisfied with the points stated in the partnership deed and application form, the authority will record an entry in Karnataka Register of Firms and issue an Acknowledgement as a proof for Registration.
Step 8: On receiving the intimation of successful processing, log in the portal and download the Acknowledgement (proof for firm registration).
Register of Firms
The Register of Firms maintained at the Department of District Register holds complete and up-to-date information of all registered firm. The Register of Firms is open to inspection by anyone on payment of the applicable fees.
It is important for all partnership firms to apply for Registration with the Income Tax Department and have a PAN Card.