Partnership Firm Registration


Partnership Firm Registration is a process to register a Partnership Firm to get the legal status and the legal advantages of registration. Partners of the Registered Partnership Firm and the Registered Partnership Firm can sue each other in case of a dispute.


What is Partnership Firm?

When two or more persons enter into a relation to carry on a business to earn profits. The persons are known as Partners, the firm is called as Partnership Firm and the name under which the business is carried on is called as Firm Name.

Unlike Company, Partnership Firm is not a separate legal entity as it is not a juristic person thus, the partners have unlimited liability. The Indian Partnership Act, 1932 is the governing law of the partnership firm.


Partnership Firm Terminologies – Section 4 of the Indian Partnership Act, 1932

  • Partnership Firm – Partnership Firm is a relation between two or more persons to carry on a business and to share the profits of the business.
  • Partners & Firm – Persons who enter into partnership with one another then individually they are known as Partners and collectively referred as Firm.
  • Firm Name – Firm name is the name under which the firm carries on business.


Who can become a partner in a Partnership firm?

Any person who is eligible to enter into a Contract can become a partner in the Partnership Firm.

  • Individual – An individual person who has a capacity to make a contract can become a partner in a partnership firm.
  • Company – Since Company is a juristic person therefore it is capable to enter into a Contract. Thus, companies can become a partner in a partnership firm.
  • Partnership Firm – Partnership Firm cannot become a partner in a partnership firm as it is not an artificial person.


Eligibility of a person to enter into a Contract is as follows – Section 11 of the Indian Contract Act, 1872

  • Major
  • Sound Mind
  • Not disqualified by law


Is it mandatory to register a Partnership Firm?

No, it is not necessary for a Partnership Firm to get registration in order to start the business operations as there can be unregistered partnership firms too. But the Unregistered Partnership Firms cannot get the registration benefits like the partners cannot sue each other, Firm cannot legally obligate other persons to fulfill contracts. Moreover, third parties can sue the unregistered firm in case of any conflict.

The Registered Partnership Firms are mandatorily required to use the word ‘Registered’ at the end of the Firm Name.


What are the types of Partnership Firm on the basis of Registration?

Registered Partnership Firm

Registered Partnership Firm is a Partnership Firm which is registered with the Registrar of Firms and is governed under the Indian Partnership Act, 1932. It can avail the benefits of registration provided under Section 69.

Unregistered Partnership Firm

It is a partnership firm which is not registered under the Indian Partnership Act, 1932 rather the Firm is formed by entering into Partnership Deed by all the proposed partners to carry on the firm business. Unregistered Partnership Firms do not have to pay the stamp duty and they are absolutely legal.


Form Unregistered Partnership Firm


How to Register Partnership Firm?

Choose the Name of the Firm

The first step in registering a partnership firm is to choose an appropriate name for the partnership firm. The Firm name should not resemble or imitate any other registered firm’s name. The name must be in accordance with the Section 58(3) of the Indian Partnership Act, 1932. 

Partnership deed

Next, the partners shall draft the Partnership deed.  The Partnership Deed charts out the relation between or among the partners and the relation of partners with the firm along with the other following details:

  • Name of the firm
  • Address of the firm
  • Duration of the firm
  • Contribution of each partner
  • Profit sharing ratio
  • Nature of the business


Draft your Partnership Deed

Execution of Partnership Deed

Subsequently, the deed has to be duly signed by the partners and be duly stamped in accordance with the law. Partners’ signature must be signed in the notary form. The important point to note here is the payment of stamp duty. Thus, the firm has to pay the stamp duty as per the state stamp duty law to execute the deed.

Apply for PAN for the Firm

Then the firm has to apply for Permanent Account Number (PAN) in the firm name as the PAN is an essential document for firm registration. 

Apply for PAN

Open Bank Account

Once the PAN card is received, the firm shall open the Bank Account in the name of the firm and then al the bank transaction of the firm will be done through this account only.

Open Bank Account

File Application for Firm Registration – Form No. 1 – Section 58

Thereafter, the Partners shall file the Application to register a partnership firm in Form 1 with the Registrar of Firms. In the application form, the firm must state all the required details about the firm to be registered like name of the firm, official registered address, and must submit  the following documents with the Registrar –

  • Certified Copy of Partnership Deed
  • Affidavit Specimen
  • PAN Card
  • Official Address Proof
  • Identity Proof and Address Proof of the Partners

Certificate of Registration

Lastly, the Registrar will examine the application thoroughly and if he is satisfied with the application then he shall issue the certificate of registration to the firm. The Registrar will make the entry of registration in the Register of Firms (Section 59). Thus, the firm shall be legally registered from the date of the entry of registration. Thus, the partnership firm can initiate the business operations immediately.

Register your Partnership Firm


What are the documents required for Partnership Firm Registration in India under the Indian Partnership Firm Act, 1932?

From Partners –

  • Self-Attested Copy of Identity Proof – PAN Number
  • Self-Attested Copy of Address Proof – Aadhar card/ Driving License/ Passport/ Voter ID Card
  • Passport Size Photographs of all partners

From Firm –

  • Partnership Deed
  • PAN Card in the name of Firm
  • Address proof of the firm – Utility Bill + Rent Agreement
  • Affidavit that all the details mentioned in the Deed and documents are correct and true


Apply for Documents Preparation


What are the benefits of Partnership Firm Registration?

Easy to form

Since the Partnership Firm is a Contractual Relation between the partners and there are minimal registration compliances thus it is comparatively easy to form Partnership Firm.

Less Legal Compliances

Partnership Firms have less legal compliances as compared to body corporates or other business forms.

Easy to Dissolve

Partnership Firm can easily be terminated by either by deciding the duration of partnership at the time of making partnership agreement (known as Partnership at will) or in case the duration was not specified then all the partners can mutually decide to dissolve the firm (Dissolution by Agreement – Section 40).

Number of Partners

  • Minimum – 2
  • Maximum – 50


What is the Effect of Non-Registration of Partnership Firm?

No Right to Sue the third party

An Unregistered Partnership Firm does not have a right to sue any third parties for the infringement of any contract entered by the firm and the third party.

Partners cannot sue each other

Neither the firm can sue the partners nor can the partners sue other partners for breach of partnership deed or to claim interest arising out of the partnership deed.

Can be sued

Third parties possess a right to sue the unregistered partnership firm in case of breach of contract between the third party and the firm.

No Right to Set-Off

Third parties cannot claim a set-off exceeding 100 rupees against an unregistered firm.


What are the privileges available to the unregistered partnership firms?

  1. Third-party has a right to take legal action against the Unregistered Firm.
  2. Partners can file a suit against each other only in the case of dissolution of firm and settling of accounts at the time of dissolution.
  3. The Firm have a right to bring a suit against the third parties for the breach or piracy of patent right.
  4. Not required to pay stamp duty.



The business of the Partnership Firm is collectively managed and governed by the partners and the partners share the responsibilities and liabilities among themselves.  A partnership firm has become a well-known business structure especially among up & coming entrepreneurs because of flexibility and less legal compliances.

If you are planning to start a Partnership Firm then Consult the Professional Team of Manthan Experts for absolute guidance and to register your Partnership Firm with ease.

Register your Partnership Firm
Knowledge Source:

LLP Registration Process in India

Detailed Understanding of LLP Compliances

Winding Up of LLP – Complete Procedure

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