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What is Business Partnership firm Registration?
Partnership is defined as association of two or more persons who have come together for Business purpose and agreed to share profit (loss) arising out of the said Business, carried on by all or any of the Partners.
Partnership Firms in India are established and Governed by the provisions of Indian Partnership Act, 1932 (referred as “Act”). The establishment procedure of Partnership Firm under Indian Partnership Act, 1932 leaves the Partnership Deed Registration with Registrar of Firm (RoF) at the will of the Partners in the Firm.
The partners of the firms may Register Partnership Firm Online considering the benefits of Registration. Let us first know how the Partnership Firm registration in India will be beneficial compared to unregistered Partnership Firm.
Benefits of Business Partnership firm Registration
- Ability to file case against Third Parties:
The partners of the registered Partnership Firm can bring third parties to the court for resolution of disputes arouse during the course of Business or any other matter relating to the Partnership Firm.
An unregistered Partnership firm loses the right file the case against third party for resolution of their disputes until and unless the procedure of Deed Registration has been completed. However, the third party always own the right to file the suit against a Partnership Firm irrespective of its registration status.
- Power to file suit against co-partners:
As none knows when the dispute between the Partners arises, whether for the sharing of profits or any other matter regarding operations of the Partnership Firm. The resolution of any dispute is best resolved by the Court of Law.
The Partners of an unregistered Partnership Firm cannot enforce any clauses of Partnership Deed. To enforce the said clauses, the registration for Partnership Firm shall be required by following the procedure prescribed for the same.
- Ability to claim Set-off:
The registration of Partnership Firm enables the partners with power to claim set-off. When any third party files a suit against the Partnership Firm, the Partnership Firm can claim the set-off, if any against the claim of third Party. The said power to claim set-off is not available when the Partnership Firm is not yet registered under the Indian Partnership Act, 1932.
- Higher Credibility:
Compared to an unregistered Partnership Firm, a Partnership Firm which has completed the procedure of Online Registration of Partnership Firm enjoys higher credibility. Although both registered and unregistered Partnership Firms are legal and valid under the given Act, the Registered Firm is highly preferred by authorities over unregistered one.
- Conversion of Entity:
A Partnership Firm as registered with the Registrar of Firm has ease compared to an unregistered firm for conversion. The conversion of the Partnership Firm into any other entity such as Private Company or LLP i.e. in corporate structure can be easily completed.
- Documents required for Business Partnership firm Registration
- Self-attested copy of PAN card of Partners
- Self-attested copy of Address Proof of Partners
- Utility Bill as Business Address Proof
- Rent or lease Agreement of Business Address (if place is rented)
- NOC from the owner of Business Place (if place is rented)
- Original Partnership Deed
- Application form in the prescribed format
- Any other documents as required by Registrar