Partnership firms are when two or more people pool their money to start a business. Profit is the primary goal of partnership firms. The Indian Partnership Act of 1932 defines the laws that apply to partnerships in the country.
Overview of Partnership Firm in Hyderabad
Partnership firms are India’s second-most popular type of business entity, closely behind sole proprietorships. A growing number of entrepreneurs prefer partnerships to proprietorships. This trend began with the increase in emphasis on specialisations. People focus on specific specialisations when choosing educational qualifications, meaning they are the best at one thing. A partnership firm allows specialists in different aspects of a business to come together and form a single holistic entity where each partner handles their speciality.
Another reason partnership firms are a great choice for start-ups is that they do not require registration. However, in the present day and age, businesses without formal registration are frowned upon. So a partnership firm wanting to increase the scale of its business through improved credibility can get its firm registered officially with the government any time they wish, even after the commencement of business, a luxury that is not afforded to companies and LLPs who have to register themselves before they can commence business. Not only does this provide a lot of flexibility, but it also allows the partners to focus on the more critical aspects of the business in the early stages.
Furthermore, compared to Limited Liability Partnerships, such firms require less compliance and are easier to form. Partners do not have to obtain separate DSCs, DINs, or so on to register as a Partnership Firm. Also, the partnership firm falls under the state Government’s purview, not the MCA. Now that you know why people prefer to go ahead with the registration of Partnership Firms, specifically in Hyderabad, for this article. Let us take a look at how it’s done.
Registration Of Partnership Firm In Hyderabad
The process for the registration of a partnership differs from state to state. This is mainly because of the stamp duty, which is set by the state administration depending on its economic plans and strategies. But the process is the same, with a few minor differences. The most significant difference concerns the value of the stamp paper used to draft the Partnership Deed and the partnership registration fees.
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Laws Regarding Partnership Firm Registration
The Registration of Partnership Firms comes under Section 8 of the Indian Partnership Act 1932. As per this Act, partners can choose whether or not they want to register their firm and have the option to do so at any time they find it necessary. Therefore, the registration of partnership firms is not mandatory at the time of formation and may be done at any time post-commencement of operations. The regulatory authority for the registration of firms is the Registrar of Firms. In Telangana, this process is authorised and regulated by the District Registrar of the Registration and Stamps Department.
What Are the Documents Required?
The following documents must be appended to the application form while registering a p partnership in Hyderabad.
- Form No-1
- Affidavit Specimen indicating the partner’s permission and intent to start a firm
- Certified copy of the Partnership deed
- Proof of address of the business place
- ID and address proof of all partners
How To Register A Partnership Firm In Hyderabad
The partnership firm registration in Hyderabad occurs through the Registration and Stamps Department. This comes directly under the Telangana Government, and most of the registration procedure happens through their official website. Here’s a look at the steps to register a partnership firm in Hyderabad.
- Before registration, the partners must verify the partnership firm’s proposed name to prevent infringement of a registered trademark or copyright. While you can register a firm with a similar name, this could lead to legal trouble later on and must be avoided. This check can be performed on the trademark portal online.
- Once the partners have decided on the name of the partnership firm, they can proceed with the registration process.
- Next, the partners must create a partnership deed. The partnership deed is a document that contains all the required details regarding the firm and its partners. Since an oral deed has no value regarding taxation purposes, the deed must be written and registered.
- A partnership deed must contain the following details and information;
- Name and address of the Firm
- Name and address of all the partners
- Nature of business
- Date of business commencement
- Duration of the partnership
- Each partner’s capital contribution
- Profit-sharing ratio
- Procedure to arrange for an audit
- Salaries and commissions are paid to each partner.
- Rules, duties, and responsibilities of each partner
- Each partner’s Loan and capital interest
- Specify rules to follow in case of death or retirement of partners
- The partnership deed should be on a stamp paper of appropriate value per State laws. After registration, each partner must retain a copy of the deed, and a copy must be provided to the Registrar of Firms.
- The partners should then go online to the official website of the Telangana Government and fill out the application form.
- They will have to submit the following details online;
- Firm name and address
- Mention any branches and other businesses
- Date of joining of each partner
- Names and addresses of all partners
- Firm Duration
- All the partners should sign the application form.
- The registration fee payment must be made online through the official portal.
- Lastly, the partners must send the form along with the supporting documents to the Registrar of the area.
- Once the documents arrive at the District Registrar’s office, a Senior Assistant will verify them.
- Once the documents arrive at the District Registrar’s office
- After successful verification, an approval letter will assign to the District Registrar. After successful verification, an approval letter is sent to the District Registrar.
- The District Registrar will approve and digitally sign the registration certificate based on the recommendation. Based on the recommendation provided, the District Registrar will approve.
- The firm must register with the IT department and apply for a PAN card for tax purposes.
- After obtaining the PAN, the partners can open a Current Account in the firm’s name to carry out business transactions.
- Issuing the Certificate of Registration typically takes three days if the verification is successful.
Conclusion
As mentioned before, registering a partnership differs from state to state. It is always advisable to engage a legal expert who understands how the administrative machinery works, has knowledge of the stamp duties and fees applicable and knows how to access the online portal and navigate through it. If you have any other queries regarding partnership firms or wish to register your firm and require guidance, feel free to contact us, and we will ensure that you receive the best assistance for your requirements.
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