Partnership Firm Registration in Telangana
Partnership Firm Registration in Telangana
Partnership firms are the second most common type of business entity in India after proprietorship. One of the most significant advantages of a partnership firm is that more than one person can invest and run the business. Further, when compared to an LLP, partnership firms are more comfortable to register, as there is no requirement for obtaining DSC, DIN or Name Approval. Partnership registration falls under the purview of State Governments while LLP registration falls under the purview of Central Government under the Ministry of Corporate Affairs. (Partnership Firm vs LLP).
In case one require assistance with Partnership Firm Registration, get in touch with an IndiaFilings Advisor at [email protected].
In Telangana, registration of Partnership Firm can be completed through the Registration and stamps Department of Telangana Government. In this article, we look at the procedure for registration of partnership firm in detail.
Partnership Registration – Indian Partnership Act, 1932
The law relating to a partnership firm is contained in the Indian Partnership Act, 1932. Under Section 58 of the Act, a firm may be registered at any time (not merely at the time of its formation but subsequently also) by applying with the Registrar of Firms (the District Registrar, Registration and Stamps Department in the State of Telangana) of the area in which any place of business of the Firm is situated or proposed to be located.
Before registration of a partnership firm, it is recommended that the applicant verifies whether the proposed name is not similar or identical to an existing company name, LLP name or trademark. Though a partnership firm could be registered with the same name, it could lead to legal hassles in the future. Hence, it is best to do a quick name availability check and trademark search.
Acceptable Name for Partnership Firm
After completing a name check against MCA and trademark database, Partners are also requested to consider below-mentioned rules while selecting a name for their Firm.
- The names must not be excessively comparative or indistinguishable, making it impossible to the name of another current firm doing comparable business; this is important to avoid confusion. The fundamental explanation for this rule is that the goodwill or notoriety of the Firm might be harmed if another firm could receive a partnered name.
- As per Section 58(3) of Indian Partnership Act, 1932, the name of a firm should not contain words like Crown, Emperor, Empress, Empire or words communicating or inferring the endorse, endorsement or support of Government except for when the State Government connotes its assent in composing for the use of such words as a component of the firm name.
Create a Partnership deed
A partnership deed is a document in which the respective rights and obligations of the members of a partnership are written. A partnership deed agreement should be in writing because an oral agreement does not have any value for tax purposes.
The following are the essential characteristics of a partnership deed:
- Name and address of the Firm as well as all the partners
- Nature of business to be carried on
- Date of commencement of business
- Duration of the partnership (whether for a fixed period or project)
- Capital contribution by each partner
- The profit-sharing ratio among the partners
On addition to the above requirements, the partners may point out any extra clauses if they wish to include. Some of such additional clauses are:
- Preparing accounts and arranging for audit
- Commissions, Salaries to partners
- Partner’s Loan, Partner’s capital interest
- Designating the partners with powers, obligation, and duties
- Follow-up of specific rules in death, retirement cases
According to the Indian Stamp Act, the partnership deed should be on a stamp paper. Each partner should have a copy of the partnership deed. While registering the partnership firm, a partnership deed should also be filed with the Registrar of Firms.
Documents Required for Registering a Partnership Firm
- Prescribed Registration Form for Incorporation of a firm (Form No-1 and Specimen of Affidavit)
- A real certified copy of the Partnership deed
- Ownership proof of the principal place of business
Fee for Registering a Partnership firm
|Sl.No||Document or act in respect No. of which the fee is payable||Maximum Fee|
|For Firm registration||For each Partner||Rs.100|
|Change of principal place or name of the Firm||Rs.100|
|Noting of closing and opening of branches.||Rs.100|
|4||Noting of changes in names and addresses of partners.||Rs.100|
Recording of changes in and dissolution of a firm
Rectification of mistakes
Inspection of the Register of Firms
For inspecting the of each Firm in the Register
|Inspection of the Register of Rs. 20 Firms||For each inspection of all documents relating to one single Firm||Rs.20|
|9||Copies from the Register of Firms||For every hundred words or part thereof|
Rs. 4 or part thereof.
Procedure to Register a Partnership Firm
Step 1: Fill the application or statement; the following details should be entered in the application.
- Firm name
- Place or principal place of business of the Firm
- Names of any other places where the Firm carries on business
- Date when each partner joined the Firm
- Names in full and permanent addresses of the partners
- Duration of the Firm
Step 2: Application must be signed by all the partners or by their agents, specially authorised in this behalf.
Step 3: Along with application form and the prescribed fee, the registration of a firm may be done at any time by sending by post or delivering to the Registrar of the area in which any place of business of the Firm is situated or proposed to be located.
Step 4: If the Registrar is satisfied with the points stated in the partnership deed, he shall record an entry of the statement in a register called the Register of Firms and issue a certificate of registration.
Note: The Register of Firms maintained at the office of the Registrar contains complete and up-to-date information about each registered firm. This Register of Firms is open to inspection by any person on payment of the prescribed fees. Any person interested in viewing the details of any firm can request the Registrar of Firms for the same, and on payment of the prescribed fees, a copy of all details of with Firm registered with the Registrar would be given to the applicant
All firms must apply for Registration with the Income Tax Department and have a PAN Card. After obtaining a PAN Card, the Partnership Firm would be required to open a Current Account in the name of the Partnership Firm and operate all its operations through this Bank Account.