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Registration Partnership Firm Chandigarh Mohali

Formation, Essentials, Requirements, and Procedure of Registration of Partnership Firm Under Partnership Act in Chandigarh, Mohali, and Panchkula.

 

To know about the process of registration of Partnership Firm under Partnership Act, first, we have to know the meaning of partnership. The partnership has been defined under The Partnership Act 1932. Registration Partnership Firm Chandigarh Mohali

What is Partnership Firm?

A partnership is defined as a formal arrangement between two or more parties who share ownership of the company, share the profits, and bear liability for any losses suffered. The business may even be carried out by a single person or a group of persons on behalf of all the partners. A partnership may be entered into by any two persons who are competent to contract.

Essentials of a Partnership Firm

  •  The contract for partnership – It can be oral or written, registered, or unregistered, but it must exist. It can even be implied with the conduct and mutual understanding of partners.
  • Associations of at least two persons – There needs to be a minimum of two persons to constitute a partnership. The maximum number of partners in a firm is limited under the Companies act to 10 in a banking firm and 20 in all other firms.
  • Some sort of business should be carried out with the intention to earn profits.
  • Profit-sharing between partners is an essential element.
  • A contract of mutual agency – This implies that an act done by anyone of the partners is binding upon all the other partners and the firm. Thus, every partner acts as both the principal and agent of every other partner of a firm.

Mode of creation of a Partnership Firm

A partnership is created through a contract and not through status. Hence, even if the members of a Hindu undivided family or a Buddhist Burmese husband and wife are carrying out business, they are not partners in such a business until they have entered into a contract.

(Read Also in Brief About the Contract Act 1872) 

Therefore, it is necessary to enter into a contract in order to start a partnership. Such a contract is known as a partnership deed.

Partnership Deed for Partnership Firm

A contract between two or more partners to enter into a partnership is known as a partnership deed. It can be both written and oral. Registration of the partnership deed is not mandatory. However, certain rights are only available to the partners if the deed is in written form and registered. Hence, it is strongly advised to register the partnership.

 Disadvantages of Not Registering a Partnership

  • No right to sue the partners – A suit to enforce the rights in a contract cannot be filed leaving the partners vulnerable to any malpractice.
  • No right to sue a third party – A suit to enforce the rights against a third party cannot be filed leaving the firm devoid of legal protection against clients or any other party.
  • Right to set-off is not available – You do not have the right to mutually adjust debts in a dispute with a third party. Registration Partnership Firm Chandigarh Mohali

Contents of a Partnership Deed

  • Name of the partnership firm
  • Nature of Business
  • Date of commencement of such business
  • Place of business – address of main or branch offices, centers, etc. where any communication can be sent.
  • If the partnership is for a specific time period – duration of the partnership
  • Contribution of all partners to the capital
  • Profit-sharing Ratio – if not given, it is assumed that it is shared equally
  • Salary of active partners
  • Any interest in contribution and drawings in accordance with the provisions of the Indian Partnership Act.
  • The Terms and conditions in an event of retirement or expulsion of a partner and how to continue the partnership after such an incident.
  • Distribution of duties amongst the partners and the daily functioning of a firm
  • Firm’s accounts preparation and provisions for internal and statutory audits.
  • Procedure to dissolve a firm – both voluntary and forced
  • Details on how to resolve disputes and the arbitration process followed

(Click Here To Download Partnership Act)

How to get Registration of a Partnership firm?

  • Submit an application to the Registrar with the following details:
    • Name of the Partnership Firm
    • Name and address of all partners
    • Place of business (address of main and branch offices)
    • Duration of the partnership
    • Date of joining of partners
    • Date of commencement of business
  • A signed copy of the partnership deed with all the details must be filed with the registrar.
  • The necessary fee and stamp duty must be deposited.
  • On approval of the application by the registrar, the firm will be entered into records and a certificate of incorporation will be issued.

Author: This article was written by Anmol Singla, B.A. LLB (Hons.), Student of the Rajiv Gandhi National University of Law at Patiala, Punjab.

Note: For any further information or any query you may contact us on 9855677966 or via email info@bhandarilawfirm.com