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Register a Partnership/Propritership firm

Register a Partnership firm in india

Register a Partnership firm in india

Partnership Firm Registration in India

Partnership is the most popular form of business organisation in India. The main reason for the popularity of this form of organisations is because it is easy to set-up and the number of statutory compliance required to be done by these forms of organisations is relatively less than the statutory compliance applicable to Corporates & LLP’s. There are two types of Partnership firms, registered and un-registered Partnership firm. It is not compulsory to register a Partnership firm; however, it is advisable to register a Partnership firm due to the added advantages. Partnership firms are created by drafting a Partnership deed amongst the Partners and IndiaFilings can help start a registered or un-registered Partnership firm in India.

Partnership firms in India are governed by the Indian Partnership Act, 1932. While it is not compulsory to register your partnership firm as there are no penalties for non-registration, it is advisable since the following rights are denied to an unregistered firm:

• A partner cannot file a suit in any court against the firm or other partners for the enforcement of any right arising from a contract or right conferred by the Partnership Act

• A right arising from a contract cannot be enforced in any Court by or on behalf of your firm against any third party

• Further, the firm or any of its partners cannot claim a set off (i.e. mutual adjustment of debts owned by the disputant parties to one another) or other proceedings in a dispute with a third party.

 

Registration Procedure: A partnership firm can be registered whether at the time of its formation or even subsequently. You need to file an application with the Registrar of Firms of the area in which your business is located.

 

• Application for partnership registration should include the following information:

– Name of your firm
– Name of the place where business is carried on
– Names of any other place where business is carried on
– Date of partners joining the firm
– Full name and permanent address of partners.
– Duration of the firm

• Every partner needs to verify and sign the application

• Ensure that the following documents and prescribed fees are enclosed with the registration application :

– Application for Registration in the prescribed Form – I
– Duly filled Specimen of Affidavit
– Certified copy of the Partnership deed
– Proof of ownership of the place of business or the rental/lease agreement thereof

It may be noted here that the name of your partnership firm should not “contain any words which may express or imply the approval or patronage of the government except where the government has given its written consent for the use of such words as part of the firm’s name”.

Once the Registrar of Firms is satisfied that the application procedure has been duly complied with, he shall record an entry of the statement in the Register of Firms and issue a Certificate of Registration.

 

Sole Proprietorship Firm Registration in India

A sole proprietorship is a business that is owned, managed and controlled by one person. It is one of the most common forms of business in India.There is no limit on the minimum capital for starting a Proprietorship. Therefore, a Proprietorship can be started with any amount of minimum capital.There is no formal procedure in India to register a sole proprietorship, as a sole proprietorship is considered to be an extension of the Proprietor. Therefore, the existence of a sole proprietorship business can be established only through opening a bank account in the name of the proprietorship firm or obtaining licenses required for conducting the business. To open a bank account for a sole proprietorship, RBI’s KYC norms mandate that any two of the following document must be submitted to the Bank:

Sole Proprietorship Registration through License

The existence of a sole proprietorship is established through licenses or registrations or certificates in the name of the Proprietor such as Registration Certificate issued by Sales Tax/ VAT/Service Tax/Excise department, Import Export License,Registration certificate issued under Shop establishment act.

Proprietor PAN Card

Proprietorship businesses are considered to be one and the same as the Proprietor. The PAN card of the proprietor will be used for opening bank account, obtaining licenses / registrations / certificates in the name of the sole proprietorship and filing income tax return for the sole proprietorship. Hence, obtaining PAN card for the Proprietor is the first step in establishing a sole proprietorship.

Business involved in Manufacturing or Trading

Value Added Tax or VAT tax is applicable for goods and products sold in India. Any person involved in manufacturing or trading must obtain VAT Registration for conducting business irrespective of the type of business entity. Therefore, to start a sole proprietorship business, business involved in sale of goods and products may obtain VAT or TIN Registration using the Proprietor’s PAN Card from the respective state government. However, once VAT registration is obtained, monthly or quarterly or half-yearly or annual VAT tax returns must be filed by the Proprietorship.

Shop & Establishment Act License is required for businesses that operate a store or factory or formal place of business. Shop & Establishment Act license is often provided by the Department of Labor in the State and is required to operate a business in most states. Therefore, shop and establishment license can be obtained to show proof of existence of Proprietorship business.

Business involved in providing Services

Businesses involved in providing services are liable to collect and remit service tax. Service tax registration can thus be obtained from the Service Tax Department to show the existence of a proprietorship business. However, once service tax registration is obtained, half-yearly service tax returns must be filed by the Proprietorship.

In addition to service tax registration, other registrations like shop and establishment act license or MSME registration or ESI registration or professional license can be used by the sole proprietorship to establish the existence of a proprietorship business.

With the above easy to obtain and common registration, most sole proprietorship can satisfy RBI rules for opening a bank account in the name of Proprietorship and conduct business as Proprietorship firm.

Register your Partnership/Proprietorship in just 7 to 14 days.

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