Partnership Firm Registration
Anyone who intends to register a partnership firm must understand certain basics. Are you aware that in India, sole proprietorships and partnerships are the most popular types of business organizations? This is because the two forms of organizations are comparatively easier to establish. Additionally, the applicable statutory requirements are less stringent.
What is the process of registering a partnership firm? We provide you with a comprehensive answer to this question. Additionally, we can help you with the actual registration process.
Choosing a Name?
You together with other partners have the liberty of choosing any name for your partnership firm. However, the name must not be, in the opinion of the registrar, undesirable. An undesirable name is that, which is very similar or identical to a name that belongs to another already existing organization that engages in similar business.
Additionally, you must not come up with a name that contains words such as Crown, Empire, Emperor or any other words that expressly or implicitly suggests that the government sanctions, patronages, or approves the partnership firm.
Creating Partnership Deed
If you seek our services, we will help you come up with a good partnership deed. The document contains obligations as well as rights of each member of the partnership. It also contains the following important information:
- Name of the partnership, its address, names of the partners and their respective addresses as well
- Ratio in which profits and losses will be shared
- Nature of business that will be conducted
- Ratio of capital contribution.
- Date when the business will start operating
- Duration of partnership.
Addition of Other Clauses
There are certain clauses that may not be mandatory but can play a very important role in ensuring that the partners remain united.
As a general rule of thumb, we encourage our clients to include the following clauses into their partnership deeds:
- Interest in partners’ capital, drawings, and loans.
- Procedures to follow in the event of retirement, admission of the new partner, or death of partners.
- Method and frequency of preparing financial statements as well as audit arrangements.
- Division of responsibilities.