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A partnership is a type of business structure in which two or more individuals or entities collaborate in terms of resources, skills, and capital to operate a business together. Indian Partnership Act 1932 is the governing law that regulates partnership firms in India.It is a popular choice for small businesses, professional practices (e.g., law firms, medical practices), and service-based businesses due to its flexibility and relatively simple formation process.
A partnership isn't considered a separate legal entity and may not require formal registration. You can still register your business by taking the following steps-
A partnership typically requires a minimum of two partners to be formed. The suggested number of partners can not be more than 50 for any Partnership firm.
Minimum Capital Requirement
A partnership firm has no minimum capital requirement mandated by law. The capital invested in a partnership is typically determined by mutual agreement among the partners and is specified in the Partnership Deed.
Tax Rates
For the Assessment Year 2023-24, a Partnership Firm is taxable at 30%.
A surcharge of 12% is levied on the amount of income tax if the total income exceeds the specified limit exceeds ₹ 1 Crore. Health & Education cess at 4% on the amount of income tax plus Surcharge (if any).
Following the approval of Form A and Partnership Deed by the Registrar of Firms, you will get a Certificate of Registration. This Registration Certificate includes details like the Firm’s name, Registration Number, Date of Registration, the State where the Firm is registered, etc.
It takes approximately 10-15 days to register a Partnership Firm with the Registrar of Firms. However, the duration may vary depending on various factors, such as the specific jurisdiction and documents required.
There can be delays due to:
The Partnership registration fees can vary significantly from one state to another, primarily due to differences in compliance requirements and stamp duty rates set by individual state governments.
The registration fees for a Partnership Firm can range anywhere from Rs. 500- 3000.
*The stamp duty is determined based on the capital contributed by the partners and the specific regulations established by each state governing stamp duty.
A Partnership Registration is not mandatory in most jurisdictions but is recommended to establish legal clarity and rights among designated partners.
Select an original and appropriate name for your partnership that adheres to local naming guidelines to avoid potential legal issues down the road. Our "Company Name Search" feature ensures your business name is one-of-a-kind by checking across multiple databases.
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Check company name availability using our powerful name search tool.
The validity of a certificate of registration for your partnership firm is dependent on the duration specified in the partnership deed. If you have not mentioned any specific duration, the certificate remains valid until either the partners or the Registrar of Firms cancels it.
You can verify the registration status from the records of the Registrar of Firms.
There are several reasons as to why you should prefer LLP over Partnership-
Yes, you can easily convert your partnership firm to LLP by following the below steps:
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