FAQs - PARTNERSHIP FIRM REGISTRATION
Q. How many people are required to start a Partnership firm?
A. In a Partnership firm, a minimum of 2 members are required and a maximum of 20 partners are allowed.
Q. Who can be a Partner in a Partnership firm?
A. An individual who is an Indian citizen and a resident of India can partner in a Partnership firm. Non-resident Indians and individuals belonging to Indian origin can invest in a Partnership only with the approval of the Government.
Q. What documents are required to register a Partnership firm?
A. For the partners, it is necessary to submit a PAN card along with an identity and address proof. It is recommended to draft a Partnership Deed which is to be signed by all the Partners.
Q. How much capital is required to start a Partnership?
A. A Partnership firm can be started with any amount of capital. There is no minimum requirement as such.
Q. What are the advantages of registering a Partnership firm?
A. It is very advisable to register a Partnership firm as a Registered Partnership Firm can file a suit in any court against any of the Partners or firm for the enforcement of any right arising from the contract referred by the Partnership Act. Also, only a Registered Partnership Firm can claim set-off or other proceedings in a dispute with a party.
Q. Is a Partnership firm a separate legal entity?
A. The Partnership firm and the partners are the same in the eyes of the law. In Partnership firms, the liability of the Partners is also unlimited and all the Partners are said to be jointly and severally liable for the liabilities of the firm. Hence, no, Partnership firm does not have separate legal existence of its own.
Q. Is it compulsory for partnership firms to file income tax returns?
A. A Partnership Firm must file the returns of income irrespective of the number of profits or losses made by the Partners.
Q. Can a person transfer to a partnership firm?
A. There are restrictions on the transfer of ownership interest in a Partnership Firm. A Partner cannot transfer their interest in the firm to any person without the consent of all other partners.
Q. What is a Partnership deed?
A. A Partnership deed is an agreement between the Partners that highlights the terms and the rules of the Partnership among the them.
Q. Why is a Partnership deed necessary?
A. The Partnership deed lays down all the Terms and Conditions of the Partnership. It regulates the rights and duties of each partner. A Partnership deed is a very crucial document.
Q. Is audit required for a Partnership?
A. In the case of Partnerships, it is not necessary to prepare audited financial statements each year.
However, a tax audit may be necessary based on turnover and other criteria.
Q. Can I convert my Partnership firm into a Company/LLP?
A. Yes, there is a specified procedure for converting a Partnership firm into a Company or LLP. However, the procedure is very cumbersome and time-consuming. It will be wise if an entrepreneur considers starting an LLP or a Company instead of a Partnership firm.
Q. How to open a bank account for a Partnership firm?
A. To open a bank account for a Partnership firm, a registered Partnership deed along with an identity proof and address proof of the Partner is to be provided.
Q. How will Vyapaar Pundit help you in Partnership firm registration?
A. An associate from India Filings will understand your business requirements and help you start a Partnership firm by drafting the Partnership deed. Based on the requirement we also help the partnership firms to become Registered Partnership Firms.
There are restrictions on the transfer of the Partnership Firm. A Partner cannot transfer their interest in the firm to anyone without the consent of all other partners.