General Partnership

Low costs, ease of setting up and minimal compliance requirements make it a sensible option for home businesses.

  • Gather Details

    We'll first understand your business requirements

  • Document Drafting

    The first draft will be shared with you in four days

  • Iterations

    We do two rounds of iterations, if necessary, at no extra cost

Easy monthly EMI options available
No Spam. No Sharing. 100% Confidentiality.

What is a General Partnership?


A General Partnership is a business structure in which two or more individuals manage and operate a business in accordance with the terms and objectives set out in the Partnership Deed. This structure is thought to have lost its relevance since the introduction of the Limited Liability Partnership (LLP) because its partners have unlimited liability, which means they are personally liable for the debts of the business. However, low costs, ease of setting up and minimal compliance requirements make it a sensible option for some, such as home businesses that are unlikely to take on any debt. Registration is optional for General Partnerships.

Add a Comment

6 Essential Facts on Partnership


What is a partnership firm?

A partnership firm is a business structure in which two or more individuals manage and operate a business in accordance with the terms and objectives set out in a Partnership Deed that may or may not be registered. In such a business, the members are individually partners and share the liabilities as well as profits of the firm in a predetermined ratio.

Why should I set up a partnership firm?

A partnership firm is best for small businesses that plan to remain small. Low costs, ease of setting up and minimal compliance requirements make it a sensible option for such businesses. Registration is optional for General Partnerships. It is governed by Section 4 of the Partnership Act, 1932. For larger businesses, it has lost its relevance with the introduction of the Limited Liability Partnership (LLP). This is because an LLP retains the low costs of a partnership while providing the benefit of unlimited liability, which means that partners are not personally liable for the debts of the business.

Is a partnership firm a separate entity?

The partners in a partnership firm are the owners, and thus, are not separate entity from the firm. Any legal issues or debt incurred by the firm is the responsibility of its owners, the partners.

How many partners can there be?

A partnership must have at least two partners. A partnership firm in the banking business can have up to 10 partners, while those engaged in any other business can have 20 partners. These partners can divide profits and losses equally or unequally.

Is partnership firm registration necessary?

No, registration of a partnership is not necessary. However, for a partner to sue another partner or the firm itself, the partnership should be registered. Moreover, for the partnership to bring any suit to court, the firm should be registered. For this reason, it is recommended that larger businesses register the partnership deed.

What are the main aspects of a partnership deed?

The deed should contain names of the partners and their addresses, the partnership name, the date of commencement of operation of the firm, any capital invested by each partner, the type of partnership and profit-sharing matrix, rules and regulations to be followed for intake of partners or removal.

Documents Required for Partnership Registration


  • Form No. 1 (Application for registration under Partnership Act)
  • Original copy of Partnership Deed, signed by all partners
  • Affidavit declaring intention to become partner
  • Rental or lease agreement of the property/campus on which the business is set

Get all the information in your inbox

Advantages of a Partnership


Minimal Compliance

General Partnerships do not need to appoint an auditor or, if unregistered, even file annual accounts with the registrar. Annual compliances are also fewer as compared to an LLP. General Partnerships do need to file Income Taxes and, depending on turnover, service and sales tax.

Easy to Start

It can be started with just an unregistered Partnership Deed in 2 to 4 days; registration, however, does bring a few advantages. It would enable you to file suits in court against another firm or partners in the firm for the enforcement of rights arising from a contract or right given by the Partnership Act.

Relatively Inexpensive

A General Partnership is cheaper to start than an LLP and even over the long-term, thanks to the minimal compliance requirements, is inexpensive. You would not need to hire an auditor, for example. This is why, despite its severe shortcoming (unlimited liability), home businesses may opt for it.

General Partnership Procedure


4 Working Days

Once you send in a request, our representative will get in touch with you to understand your requirements. If further details are required, we will contact you for the same. Once these are in, a lawyer will work on the request and send it to you for review within 3 to 4 working days. Feel free to get back to us if you would like any changes.

4 Working Days

In case you would like any changes to the agreement, our lawyers will work on them. Two rounds of iterations are included in the original price.

Compare Your Options


Partnership Firm Limited Liability Partnership One Person Company Private Limited Company Sole Proprietorship
Recommended For
Home businesses Professional services firms Solo promoters Start-ups and growing companies Small manufacturers & traders
Ease of Accommodating Investment
Almost impossible Possible, but unlikely Possible, but severely unlikely Very easy to accommodate Impossible
Limited Liability Protection
No Yes Yes Yes No
Tax Advantages
Minimal Most efficient Few benefits Few benefits Minimal
Perpetual Existence
No Yes Yes Yes No
Statutory Compliances
Minimal Low High High Minimal
Know More » Know More » Know More » Know More »

Why Vakilsearch


8 Working Days

Just tell us a little bit about your business and you'll have the partnership deed in 8 working days. It's that simple. In addition to yours, we'll be handling around 400 business registrations month.

9.1 Customer Score

We make your interaction with government as smooth as is possible by doing all the paperwork for you. We will also give you absolute clarity on the process to set realistic expectations.

160 Strong Team

Our team of experienced business advisors are a phone call away, should you have any queries about the process. But we'll try to ensure that your doubts are cleared before they even arise.