Partnership Firm is the most popular and common form of doing business in India. As a step towards ease of doing business initiative, now the partnership firm can be registered online in Maharashtra. The Government of Maharashtra has launched a website through which partnership firms in Maharashtra can now be registered online.
What is a partnership firm?
In simple terms, the partnership means a relationship between two or more persons who have agreed to share the profits of the business carried on by them.
Therefore persons who have agreed to run the business together enter into a contract and such a union is called a partnership firm.
Registration of a partnership firm is not mandatory but there are added advantages with the registered partnership firm. Partnership Firm is governed by the Indian Partnership Act, 1932.
Key elements of a partnership firm:
- The contract is to form a partnership
- Formed with the intention of doing business together
- The basic motive is to earn profits from such a partnership
- With membership (partners) limited to 20 (10 in case of banking business) and
- Working together mutually.
What is a Partnership Deed?
Partnership Deed is a written agreement or contract between two or more persons, willing to undertake the business together. It consists of all the terms and conditions between the partners who agree with their written consent.
What should of a partnership deed include?
- Name of the partnership firm
- Nature of business
- Details of partners
- The capital contribution by partners
- Profit-sharing ratio amongst the partners
- Working and administration of the partnership firm
- Rights, duties and other obligations on the partners
- Dissolution or liquidation of the firm
- Any other matters as may be necessary
What are the criteria for selection of Name of Partnership Firm?
- The name should not be too identical or similar to an existing firm doing the same business.
- The name should not contain words like emperor, crown, empress, empire or any other words which require sanction or approval of the government.
Advantages of a partnership firm:
- Easy formation: A partnership can be formed only by an agreement between the partners. Registration of partnership is not compulsory in most of the cases.
- Relatively inexpensive: The fees required for registration of partnership and compliance costs are less compared to LLP or company.
- Minimum compliances: A partnership is not required to carry out extensive compliances as compared to LLP or company.
- The audit is not mandatory.
Is it mandatory to have a written agreement?
An agreement between the partners may be oral or written, although it is always beneficial to have the partnership deed written and signed by every partner, to avoid any future conflicts between them.
Is it necessary to register the partnership firm?
The partnership can be registered at any time, i.e. before starting the business or any time during the continuation of the partnership. The Indian Partnership Act, 1932, does not make it mandatory to have the partnership firm registered. It is at the discretion of partners. But a registered partnership firm enjoys more privileges as compared to an unregistered firm.
How to register a partnership firm in Maharashtra?
Registration of partnership firms in Maharashtra was manual. The Maharashtra State Government has recently made the process online.
Below is the step by step guide for registration of partnership firm in Maharashtra:
Documents required for Registration of partnership firm
- Application for Registration of Firms in Form A, signed by all the partners.
- Certified original copy of English Partnership Deed
- Certified original copy of Marathi Translation of English Partnership Deed
- Forwarding letter with Rs. 5 stamp affixed on it
- Rs. 10 non-judicial stamp paper
- An authority letter signed by all the partners of the firm
- Copy of PAN card and Aadhar Card/Voter ID card of all the partners
- Proof of principal place of business (e.g: Electricity Bill/ Water Bill or Rent/Lease/Leave and Licence Agreement of Business Place)
- If a company is a partner then, Certified True Copy of Memorandum of Association and Articles of Association and Board Resolution
- If Trust is a partner, then certified copy of Trust Deed
- If the business requires License from the Government Department then Certified True Copy of License
- An affidavit, if applicable.
Process of Registration of Partnership Firm
The Registration is split into two parts, online procedure and offline procedure.
Online Procedure: Under the online procedure, the application is first submitted via the portal.
Step 1: Go to https://rof.mahaonline.gov.in/. Click on “New Registration”, the below window will appear, fill in the details and click “Register”. The user will be registered.
Step 2: Once the Registration is done, log in to your account and select Form A (available in the left sidebar)
Step 3: Fill in all the details such as the name of the firm (in English and Marathi language), principal place of business of the firm (in English and Marathi Language), duration of the firm etc. in the application form and click “Next”.
Step 4: On the next page, enter the details of partners. To add partners click “Add Partner” and enter their details. There must be a minimum 2 partners.
Step 5: Along with the application, it is necessary to upload all the mandatory documents (mentioned above), scanned and attached with the application.
Step 6: Submit the application by clicking the Submit” button.
Important points to remember while filling an online application form:
- For Online application, CA/Adv need to create New ID for every Firm.
- There are 4 centres for submission of application. Select the centre with reference to your place/ area. Below are the details of centres:
- An authority letter (for submission of application) is required if the application is submitted by Chartered Accountant (CA) or Advocate, and the same shall be included while submission of Form A online.
- The Partnership Deed need not be attested. Certified copy of the Partnership Deed is sufficient. If the deed is attested, then date of execution and date of signature of Notary should be the same.
- If the company is a partner, then a copy of Memorandum and Articles of Association and a copy of Resolution authorizing one of the Directors to sign on Deed and Forms shall be attached with the application.
- Stamp duty on documents shall be as per the Maharashtra Stamp Act.
- If any particular business requires licence/permit, then such license/permit shall be obtained. If the same is not obtained, Undertaking in Affidavit form signed by all the partners should be submitted. The businesses like Petrol Pump/L.P.G.Gas/Kerosene, Ration Shop/Liquor require the permission of Licensing authority to carry out business in partnership. In such cases Copy of License is mandatory.
- The fees or penalty shall be paid online or through payment gateway only.
Offline Procedure: Once the online application is submitted, the applicant shall proceed with the offline process.
Step 1: Download the Form -A (application submitted online) and print on the Green Ledger paper. The printed copy shall be countersigned by all the partners.
Step 2: Send all the requisite documents along with online application print to RoF by post or submit the documents by hand. (The RoF authority and their address as per area/place of business for sending documents is mentioned above)
Once submitted successfully, the Department will acknowledge the application and proceed with the verification.
If any objection is raised by the Department, the same will be sent to the email id of the applicant.
After approval, the approver will issue a digitally signed copy of the certificate and the same will be available in application login. A certified copy of the certificate will be issued to the applicant via post/hand delivery.
Key points to remember:
- Write correct spelling of the name of the partnership firm, and description of the business activity as once submitted cannot be modified.
- Stamp paper must be in the name of the firm or partners.
- Date of filing of documents must be within one month of such notarization.
- The stamp paper which is used for the execution of Deed of Partnership should be dated within 6 months of the date of issue of such stamp paper.
- If Deed is not duly stamped or in other cases if six months have elapsed after the execution of deed then in such cases the deed is required to be Adjudicated by the Stamp Authority.
- If an application is submitted through C.A. or Advocate or any third party other than the firm itself then an Authority letter signed by all the partners is required to be submitted along with the application
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Disclaimer: The information given on this site is based on my understanding and knowledge on the subject and does not constitute legal opinion or advice to the users. All information is provided in good faith, to create awareness of legal provisions, compliances and procedures and are solely for knowledge sharing purpose. however, we make no representation of any kind, express or implied, regarding the accuracy, adequacy and completeness of any information on site all the time. Hence you are advised to opt for professional advice before acting on the information provided herein.