Apartnership is a form of business where two or more people form a business entity to share the ownership, as well as the responsibility to manage the business enterprise and the income or losses that the business generates. In India, all the aspects and functions of the partnership are administered under ‘The Indian Partnership Act 1932’. This specific law explains that partnership is an association between two or more individuals or parties who have accepted to share the profits generated from the business under the supervision of all the members or behalf of other members..
The Partnership firm can be of both types i.e. registered as well as unregistered. The Indian Partnership Act, 1932, does not require the Partnership Firm to be registered i.e. there is not any requirement of the Partnership Firm to be a registered Firm. The only requirement of the act to commence the business as a partnership is the execution of a Partnership Deed between the Partners. Therefore various partnership businesses exist as an unregistered firm.
But unregistered partnership firms have certain rights denied in Section 69 of the Partnership Act, which deals with the effects of non-registration of a partnership firm. Some of the disadvantages of an unregistered firm are:
No partner can file a suit against other partners of the firm..
The firm cannot file a suit against any partner
A partner cannot file a suit to enforce a right arising from the contract or conferred by the Partnership Act against the firm.
Therefore every partnership firm should be registered sooner or later.
The application for registration of Partnership Firm must contain the prescribed registration form for incorporation of a company, identity proof/address proof of Partners, certified true copy of the Partnership deed entered into and proof of the principal place of business.
No partner can file a suit against other partners of the firm..
The firm cannot file a suit against any partner
A partner cannot file a suit to enforce a right arising from the contract or conferred by the Partnership Act against the firm.
Sale deed in case one of the Partner owns the place of business.
Rental agreement copy if the premises are rented
Copy of latest electricity bill or water bill or property tax receipt
Partnership firms in India can be divided into two categories namely, registered partnership or unregistered partnership. Registered partnership firms are those firms having a registration certificate from the Registrar of Firms. All other partnerships that do not have a registration certificate would be classified as an unregistered partnership firm. Under Income Tax Act, a partnership firm is defined as “Persons who have entered into a partnership with one another are called individually “partners” and collectively “a firm”, and the name under which their business is carried on is called the “firm name”.
