Two or more people sharing profits under a written deed. Registration with the Registrar of Firms is technically optional, but an unregistered firm loses the right to enforce its own contracts in court.
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Profit share, capital contribution, partner duties, admission and retirement terms and dispute resolution are drafted around how the business will actually run.
Stamp duty is state specific and depends on capital contribution. The deed is executed on stamp paper and notarised.
Form 1 is filed with the Registrar of Firms for the state, along with the deed and partner details.
The firm PAN and TAN are obtained and the current account documentation is prepared.
An unregistered partnership firm cannot file suit to enforce a contract against a third party, and a partner cannot sue the firm or other partners to enforce rights under the deed. You can still be sued. The saving from not registering disappears the first time a customer refuses to pay. Register at the start rather than scrambling when a dispute arises.
Not strictly, but the consequences of not registering are severe enough that it should be treated as compulsory. An unregistered firm cannot enforce its contracts in court.
A partnership offers no limited liability, so partners are personally liable for firm debts. An LLP limits liability to contribution but carries mandatory annual filings. Partnerships are simpler and cheaper to run.
The firm is taxed as a separate entity at a flat rate, and partner remuneration and interest on capital are deductible within limits set by the Income Tax Act.
Yes, through a supplementary deed recording admission, revised profit sharing and capital. The change is then filed with the Registrar.
Yes. Conversion is permitted and common once liability exposure or turnover grows, but it is a fresh registration process with its own cost.
Tell us about your partners and we will confirm the deed terms and documents needed.
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