Partnership Firm Registration Rules and Regulations in India: Complete guide

Partnership Firm Registration Rules and Regulations
Japsanjam Kaur Wadhera
| Updated: Dec 28, 2020 | Category: Partnership Firm

A partnership firm is a firm where two or more people come together to form a business and divide the profits thereto in an agreed ratio. A partnership firm is registered with the registrar of the firms. Every partnership firm is required to form a Partnership Deed between the partners which is formed for the purpose of determining the responsibilities, rights, share of profit and etc. between each partner. The partnership firm registration rules and regulations are defined under the Partnership Act, 1932[1].

This article will provide you with a complete guide of rules and regulations for the registration of a partnership firm under the Partnership Act.

Understanding Partnership Firm and Partnership Firm Registration

A partnership firm is formed by two or more individuals to work together for a common goal. The formation of a partnership firm is easy as no complex business formalities are required to be done and the compliance is less as compared to the other types of business entities.

A partnership firm is formed with the motive of sharing profits along with uncertainty or any losses that occurred in the business.

The Partnership firm registration is not compulsory and it is at the discretion of the partners to register a partnership firm or not. However, no legal benefits can be availed by a partnership firm, if it is not registered. Therefore, for the protection of the business of a partnership firm, from any troubles in the future, and to enjoy the special rights available to a registered firm, registration of a partnership firm should be done.

What is the minimum number of members required to incorporate a Partnership Firm?

The minimum number of members required to incorporate a Partnership firm is two, and the maximum should be one hundred according to the new amendment in the Act.

Types of businesses that should be registered as a Partnership Firm

A small business consists of a sole proprietorship which suits best when one person can easily conduct the business in accordance with the requirements and needs. However, with the growth, the demands of more than one set of skills, sales, and management person etc. increase for the business as well. And with this, small enterprises make changes and turns towards forming a partnership firm for doing business.

Therefore, Partnership firms are ideal for: –

  • Those businesses that require a different set of skills, expertise like legal firms, construction firms, managerial talent, etc.
  • Businesses who choose to avoid several complex compliance requirements for the flexible operation of the business.
  • Businesses involving retail trade, wholesale trade, small manufacturing units and etc. that requires medium capital.

What is a Partnership Deed?

A partnership deed is an agreement between the partners that defines the terms and conditions involved in a partnership. It states all the responsibilities, rights and duties, share of profits and all the other details of every partner formed at the beginning. A partnership deed can be oral or written, but it is always recommended and suggested to form a written agreement, which can be used later if required to prove its existence.

The partnership deed requires the general and specific details to be included in the deed. The following are the details that should be included in the partnership deed of a firm:

Partnership Deed of a Firm

General Details

  • Name and Address of the partners and the firm.
  • The date of starting a business.
  • The duration for which a partnership is being formed, that is years or a specific project.
  • The kind of business that is being or to be undertaken by the firm.
  • The capital contribution made by each of the partners.
  • The ratio of profits and losses shared among each partner.
  • The rules and regulations in relation to the intake or removal of the partners.

Specific Details

Besides the above details, certain specific clauses may be mentioned to avoid any conflict at a later stage:

  • The interest on capital that is invested by the partners or loans if provided by the partners.
  • The rights, duties and obligations of the partners
  • Commissions, salary or any other amount payable to the partners
  • If death or retirement of a partner or dissolution of a firm, the adjustments or processes to be followed on account of it.
  • Any other clauses that the partners may decide by mutual decision and discussion.

What is the procedure for a Partnership Firm Registration?

A partnership firm registration can be done by following the below mentioned steps:

  • Application in form A must be submitted to the Registrar of Firms for the registration of the partnership
  • The next step is to submit a duly signed and certified copy of Partnership deed
  • The applicant is required to make the payment of fees along with necessary stamp duties.
  • Once the application is approved by the Registrar, an Incorporation Certificate is issued to the applicant and the firm is added into the records.

What are the documents required for the Registration of a Partnership Firm?

The documents required for the registration of a partnership firm are as follows:

The address proof and identity of the Partners, in which any following two documents are required to be submitted.

  • Aadhar Card
  • PAN Card
  • Passport
  • Voters id
  • Driving license

Proof of the principal place of the business, by submitting the following documents:

  • If the premises is rented, then the copy of a Rental Agreement.
  • If the place of business is self – owned, then the copy of the Sale Deed
  • Copy of the water bill, electricity bills, Utility Bill or the receipt of property Tax.
  • No Objection Certificate (NOC) from the owner.
  • PAN of the Firm.
  • Partnership deed.
  • The affidavit, specifying the details mentioned in the deed and documents are correct.


A partnership firm is one of the easiest forms of an entity which can be incorporated by an entrepreneur who wishes to have less legal formalities in starting his business. The registration of a partnership is not mandatory, however, the firm can avail many legal benefits and protection if it is registered. The Partnership firm registration rules and regulations are specified under the Partnership Act, 1932.

Also, Read: Know the complete difference between OPC and LLP

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Japsanjam Kaur Wadhera

Japsanjam Kaur Wadhera is an Advocate and has completed her BA.LLB (Hons) and has experience of writing various research papers during her college time. Earlier she was working as an Associate Advocate in a reputed Law Firm. She has an extreme interest in writing legal content and her core area falls under legal enactments, tax and finance.


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