PARTNERSHIP FORMATION

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

17 December 2010 DEAR SIR
PLEASE PROVIDE ME FULL PROCEDURE OF FORMATION OF PARTNERSHIP FIRM.

WHAT IS LEGAL REQUIRMENT?.

IS IT REQUIRED TO REGISTERED ?

PLZ PROVIDE ME SUCH INFORMATION.

THANKING YOU.

CA Sanat Pyne

CA Sanat Pyne (Expert)
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17 December 2010 It is not “necessary” to registar a partnership with the Govt. in most states of the country. (In Maharashtra it is almost compulsary. Check the laws in your state to be sure.)

However, if you do not register your partnership, you will not be legaly protected from disputes between partners etc. as we have explained before. So, it is always wise to register your parnership with the Govt.

In any case, even if you choose not to register your partnership, you should still prepare a “Partnership Deed” which will help resolve problems when disputes between partners arise.

The general procedure for registering a partnership firm all over India is quite similar:

You have prepare a “Partnership deed”
Fill in the required form at the “Registrar Of Firms” office near you.
Submit the required form, the “Partnership Deed” and other supporting documents to the “Registrar Of Firms” for approval.

Preparing the “Partnership Deed”
The “Partnership Deed”, as stated above, must contain:

The amount of capital contributed by each partner
Profit or loss sharing ratio
Salary or commission payable to any partner, if any
Duration of business, if any
Name and address of the partners and the firm
Duties and powers of each partner
Nature and place of business; and
Any other terms and conditions to run the business
The partnership deed is usually not very hard to prepare through a local lawyer.

This partnership deed must be made on stamp paper as per the laws of the place of signing. The whole process of drafting the partnership deed can be done through a trusted lawyer. It should cost you around Rs.1000/- to prepare the deed.

After preparation of the deed, it must be signed by all the partners. It must also have signatures of independent witnesses.

The deed is then submitted to the “Registrar Of Firms” along with the registration form and other supporting documents. On approval of these documents by the “Registrar Of Firms” the “Partnership Firm” is established as a legal entity and can start business under the chosen name.

Querist : Anonymous

Querist : Anonymous (Querist)

17 December 2010 thank you very much sir

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