Partnership Firm Registration

Partnership Firm Registration

Laying foundation stones for your own business involves a ton of legalities that ensures authorized conduction of business. A business may be led by a single person or a group of persons running the trade as a unit. A partnership is one of the essential forms of a business organization where at a minimum, two members work together for the expansion of a mutual business idea or proposal.

The entities joining hands together for such a setup of business are called partners while the group is collectively referred to as a partnership firm. Company registration is the foremost step towards attaining legal recognition thereby a partnership firm registration holds as a proof of existence for any such firm.

A PFR as governed by The Partnership Act, 1932 provides a procedure to be followed while registering with the Registrar of Firms (ROF) for its legalization. This process is conducted in steps initiating with the formation of a partnership deed that contains the abstract information and covenants related to the business. This shall include the business name, place, activities, and a mutually decided share of profits associated with the firm. The importance of a partnership deed lies in the fair probability of disputes between two or people working on the same idea contrarily having different perspectives for the operational activities. Later the agreement is to be notarized after getting the signature of the partners along with the witnesses.

Further in the sequence is the registration of the firm. Unlike the English law, the Indian law for a partnership that is The Partnership Act doesn’t mark any compulsion (except for the state of Maharashtra where PFR is mandatory) for registering a firm but impose some disabilities on the non-registered firms under section 69 of the Act. Moreover, the registered firms also get to enjoy certain privileges over the non-registered ones. This flexibility in making the move mandatory is added upon by the time relaxation as well. Precisely, it is not necessary for a firm to register itself right at the time of its incorporation. They might legalize themselves even during the continuation of the partnership.