Partnership Deed and Registration of Firm

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Last Updated on April 3, 2019 by Legalseva.net

Partnership is a relationship between two or more persons who have agreed to share profit or loss of the business carried by them.

Registration Of Partnership Firm     

According to Partnership Act 1932, registration of partnership firm is not mandatory.

The procedure of registration of firm is simple

  • File an application with the Registrar of Firms on a prescribed form along with following information
  1. Name of the firm
  2. Place of business of the firm.
  3. Names and addresses of partners and the date of joining the firm
  4. Duration of the firm.   After examining, the Registrar shall record an entry in the register of firms and issue Certificate of registration

Also Read- HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH

 Benefits of registration of firm

  • Power to sue the firm or Co-partners.
  • Partners of the registered firm can file a suit against the third party.
  • If a third party file a suit against the registered firm, registered firm can claim set off.

Consequences of Non Registration of Partnership Firm

  • Partners of unregistered firm cannot file a civil suit in case of dispute but can file a criminal suit.
  • Neither firm nor the partners can sue third party.
  • Unregistered firm can’t claim setoff

Also Read- FREE LEGAL ADVICE IN CHANDIGARH, PANCHKULA, MOHALI, ZIRAKPUR

Partnership Deed
Partnership Deed is a legal document ascertaining the right and duties of the partners and avoids the unnecessary misunderstanding and disputes at the time of the dissolution.

  • Partnership act must be printed on the Stamp Paper in accordance with Indian stamp Act
  • Partnership agreement should be printed on a Non-Judicial Stamp Paper with a value of Rs.100/- or more based on the value of property held by the firm.
  •  The partnership agreement signed in the presence of all the partners.
  • Each partner should have copy of partnership deed.
  • Partnership deed should be filled with Registrar of Firm if partnership firm is registered.  \

Also Read- NON DISCLOSURE AGREEMENT (NDA) FOR COMPANIES

Content of Partnership Deed

  • Name of partnership Firm
  • Nature of the business of partnership firm
  • Date of incorporation of Business
  • Place of business i.e. address of head office and branches if any
  • Duration of the Partnership Firm (weather fixed or at will)
  • Capital contribution by the partners

Above are the minimum clauses which are required to be any partnership deed.

Also read- APPOINTMENT OF AN ARBITRATOR

Partners can also add additional clauses mentioned below

  • Profit Sharing Ratio (If it’s not there then assumed equal)
  • Salary to active Partners
  • Interest on contribution
  • Preparation of financial statement and provision for Audit.
  • Clause regarding to admission, retirement and death of partner.
  • Procedure of dissolution of the firm.

This post is written by Nidhi Sharma of Punjabi University, Patiala. For more info on the subject, please dial 99888-17966.

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