How to Register a Partnership Firm in Gujarat

Last Updated at: Jul 06, 2021
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Partnership Firm in Gujarat
On 29th August 2020, Chief Minister of Gujarat interacted with leading industrialists and corporate investors regarding the New Industrial Policy 2020 via video conference in Gandhinagar. He highlighted that Gujarat is at the forefront in embracing the Prime Minister’s vision of Atmanirbhar Bharat in true spirit.

 

A partnership firm is a common type of business structure in India due to its ease of formation and relaxed compliance requirements. The Limited Liability Partnership is a recent addition to the Indian business environment. As a result, most older companies who had fewer founders or partners opted for the Partnership Firm registration. While the basic procedure for partnership firm registration stays the same all over India, there might be a few small changes from one state to the other. In most cases, such changes come in the form of varying partnership firm registration fees and differences in the documents required. To help young entrepreneurs kick start their business journey, in this article, we will take a look at the process of partnership firm registration in Gujarat. Read on to find out more about the process of registration of partnership firms in Gujarat, and why you should opt for such a structure.

  1. What is a Partnership Firm?

  2. Importance of the Partnership Deed

  3. How to Choose A Partnership Name

  4. Documents Required to Register a Partnership Firm in Gujarat

  5. Registration of Partnership Firm in Gujarat

  6. Advantages of Registering As a Partnership Firm

  7. How Vakilsearch can help

What is a Partnership Firm?

A partnership firm is essentially a legal entity formed when two or more individuals come together and start a company based on a partnership deed. In such a business structure, all the partners share the profits or losses incurred by the business as per a preset ratio. The registration of partnership firms come under the purview of Section 4 of the Indian Partnership Act. However, this Act also makes it clear that the registration of partnership firms is not mandatory in India. To function as a partnership firm, the partners need to register a Partnership Deed but have the option to leave their company unregistered, though that is not advised. The registration of partnership firms may be done by approaching the Registrar of Firms.

Importance of the Partnership Deed

The partnership deed is the soul of the partnership firm as it lays down all the procedures and rules related to the operation of the firm. Furthermore, partners must register the deed to ensure they enjoy a separate legal status. The partnership deed holds information pertaining to the rights, duties, responsibilities and profit-sharing ratio of partners, while also addressing the nature and type of business undertaken. Furthermore, the deed also helps in preventing disputes and misunderstandings later on, as it clearly defines the role of individual partners. Here’s a quick look at the details that every partnership deed must contain;

  • Name and registered office address of the partnership firm
  • Details regarding all the partners in the firm
  • Duration of Partnership
  • Nature and type of business conducted
  • Capital contribution of each partner
  • Profit-sharing ratio
  • Date of commencement
  • Salary and commission of each partner
  • Roles and responsibilities of each partner
  • Interest on the capital of each partner’s contribution
  • Allocation of duties
  • Procedure to add, remove partners
  • The process to follow in case a former partner retires or passes away

get partnership registration 

How to Choose A Partnership Name

Partners have the freedom to choose a unique and relevant name for their business. This is usually the first step in registering a partnership firm in India. While partners can choose any name they deem fit, there are certain conditions to be kept in mind. The partners need to ensure that their chosen name does not infringe on any copyrights or trademarks registered earlier. Also, soon after deciding on a name, the partners must trademark it to avoid third-parties from using the same name. Here’s a quick look at what you need to keep in mind before choosing a name for your partnership firm.

  • The name should not be identical or copied from an existing company’s name
  • It should not be similar to the name or tagline of any existing firm
  • The name must not contain words like Crown, Empress, Emperor or RoyaltyThe name
  • must not include terms that signify that a government or royal house is backing or endorsing the partnership

Documents Required to Register a Partnership Firm in Gujarat

  • Application for Partnership Registration via Form No. 1.
  • Affidavit indicating consent of partners.
  • Notarized and registered Partnership Deed signed by all partners
  • Two Passport size photographs
  • ID and Address proof of all partners
  • Aadhaar Card
  • Proof of address of registered office via
  • Sale Deed
  • Rental agreement
  • Latest phone/electricity/water/gas bills/tax receipt
  • NOC from the owner
  • Acknowledgement slip concerning the fee payment

Registration of Partnership Firm in Gujarat

Here is a quick look at the steps you need to take to register a Partnership Firm in Gujarat:

Choose a suitable name for the firm, ensuring that it complies with the laws stated above.
Make sure you have all the required supporting documents.
Draft a partnership deed on a stamp paper worth at least INR 500.
Duly fill the application form for registration of partnership firms in Gujarat called Form -1.
Attach the attested, supporting documents as mentioned above to this application form.
All the partners must then sign the application form and submit it to the RoF of Gujarat.
On successful verification, the partners will receive a Certificate of Registration from the registrar within a week or so.

However, the partners should keep in mind that the registration of partnership firms with the RoF is different from registering for tax. To file IT returns in the right manner, the partnership firm must register with the IT department and obtain a PAN card. Once they receive the PAN, they must open a Current Account and make all business transactions through this account.

Steps for registration

  1. To register for tax purposes, the partners must visit the website
  2. Moreover, from the main menu, click on the Registrar of Firms option.
  3. Provide all the details requested, such as PAN number, firm name, area, registered mobile number and email ID.
  4. Next, fill Form – A wand upload the application form along with the required supporting documents.
  5. Further, the dealers will also have to pay the registration fee that amounts to INR 30 to complete the procedure.
  6. Once successful registration, you will receive an acknowledgement number you can use for future reference.

Advantages of Registering as a Partnership Firm in Gujarat

  • Partnership firm registration is an easy process that does not include too many formalities and legal hassles.
  • Founders get to start business proceedings as soon as the Partnership deed is registered.
  • A Partnership Firm does not have to get its financial reports audited unless the turnover exceeds a certain amount.
  • Partnership firms have very few compliance requirements, making them easy to operate and manage.
  • Additionally, they are easy to wind up and shut down as all it takes is a dissolution deed.
  • Since a partnership firm has more founders than a sole proprietorship, they have access to more resources.
  • Since the partnership deed clearly defines the roles and responsibilities of each partner, such firms are easier to manage and run.
  • Additionally, every partner bears liability helping share the risk and burden and protect personal assets along the way.
  • moreover, it helps to make the firm more credible and trustworthy
  • Allows partners to borrow money and own property in the partnership’s name

How Vakilsearch can help

  1. Submit your details, we will connect with you
  2. We will share the agreement’s first draft within 4 working days
  3. We do up to two rounds of iterations, if necessary, at no extra cost.