A partnership firm means a firm opened by a minimum of two individuals known as partners of a firm to conduct a business or carry on a profession. Partnership firms are a popular form of business structure in India as it has fewer compliances than a company. Partnership firms are registered under Section 58 of the Indian Partnership Act, 1932 (‘Act). 

However, the registration application for a partnership firm must be submitted to the Registrar of Firms of the state where the partnership firm is located. In Andhra Pradesh, a partnership firm can be registered online on the Registration and Stamps Department website.

Is Registration of Partnership Firm Mandatory?

The Indian Partnership Act does not provide that a partnership firm must be registered with the Registrar of Firms. Thus, registration of a partnership firm is not mandatory in India. Registration of a partnership firm is optional and is at the partners’ discretion. 

Section 58 of the Act provides that a partnership firm can be registered at any time after its formation by applying with the Registrar of Firms of the respective area where the firm is located. The firms situated in Andhra Pradesh can also apply for partnership firm registration on the Registration and Stamps Department website.

However, the Act provides certain benefits to the registered firms that are not available in the case of an unregistered partnership firm. The benefits that a registered partnership firm enjoys under the Act are as follows:

• A partner of a registered firm can file a case/suit in a court against the firm or other partners for enforcing any right that arises from a contract, partnership deed or right conferred by the Act.
• A registered firm or its partners can file a case/suit in a court against any third party for enforcing a right arising from a contract towards the firm.
• A registered firm or its partners can claim a set-off in a dispute with a third party. Set-off means adjustment of debts owed by the third party to the firm.

Pre-Requisites of Partnership Firm Registration

Before applying for registration of the partnership firm in Andhra Pradesh with the Registrar of Firms, the partners need to ensure that the firm’s name is acceptable, create a partnership deed and file Form-1.

Acceptable Name for Firm

The Act states that the registration of a partnership will be rejected if the firm’s name contains unacceptable names or words. The Act states that a partnership firm’s name should not have:

• Any of the following words, unless the State Government consents to use such words as part of the firm’s name by an order in writing: 
  • Crown.
  • Empero. 
  • Empress. 
  • Empire.
  • Imperial.
  • King.
  • Queen.
  • Royal.
  • Words implying or expressing the approval, sanction or patronage of the government.
• Any name that is similar to the name of a registered partnership firm likely to cause confusion to the public on account of similarity in the name.

Thus, before applying for registration, the partners must ensure that the proposed name of the firm should not be similar to another registered firm name or contain the words prohibited by the Act.

Partnership Deed

The partnership deed is a document that contains the details of the partnership firm and describes the relationship between partners. The partnership deed must be in writing and submitted to the Registrar of Firms along with the firm registration application. It is a mandatory document that should be submitted for the firm’s registration. The partnership deed contains the following details:

• Name and principal address of the firm.
• Address of any other places where the firm carries on business.
• Name, address and joining date of the partners.
• Nature of the partnership firm business.
• Commencement date of the business.
• Duration of the partnership firm, i.e. fixed period, till the completion of a project or partnership at will.
• Capital contribution of each partner of the firm.
• Profit-sharing ratio amongst the partners.
• Admission process of new partners.
• Retirement of existing partners.

According to the Indian Stamp Act, the partnership deed should be executed on stamp paper. All partners should sign the partnership deed executed on the stamp paper for the deed to be valid. The partners should have a copy of the partnership deed with them.

Filling Form-1

As per the Andhra Pradesh Partnership (Registration Of Firms) Rules,1957(‘Rules’), the partners must download Form-1 and submit it while filing the registration application with the Registrar of Firms. Form-1 is given at the end of the Rules. The Rules can be accessed here to download Form-1.

After downloading and filling the Form-1, it must be signed by every partner or their agents authorised on this behalf in the presence of a witness who must be an advocate, gazetted officer, attorney, honorary Magistrate, pleader or registered accountant. The proforma of Form-1 is provided below.

Partnership Firm Registration Procedure

Following are the steps for registration of a partnership firm in Andhra Pradesh:

Step 1: Visit the Registration and Stamps Department website of the Government of Andhra Pradesh.

Step 2: Select the ‘Registration of Firm (under section: 58)’ option on the home page. It will open the registration application page.

Step 3: Enter the applicant details such as name, Aadhaar number, gender, address and contact details.

Step 4: Enter the firm details, such as:

• Firm name.
• Firm duration.
• Industry type.
• Premises type.
• Business type.

Step 5: Fill the principal place of business details and enter other places of business, if any. 

Step 6: Fill the partner details such as partner name, age, joining date, Aadhaar, address and click on the ‘Add Partner Details’ button. The applicant can add the details of all the partners of the firm by clicking the ‘Add Partner Details’ button.

Step 7: Click on the ‘Download Self-signed declaration document’ button and take a printout of the self-filled declaration form, attest signatures of the partners and upload the document. The applicant needs to upload the documents by selecting the document type, entering the document name, clicking on the ‘Choose File’ option and clicking on ‘Add document’. The applicant must add all the required documents by clicking on the ‘Add document’ button and uploading all the documents. Click on the ‘Save as Draft’ button and then the ‘Pay and Submit’ button.

Step 8: After clicking the ‘Pay and Submit’ button, the applicant needs to pay the required fees for registration. Once the payment is successful, the registration application will be forwarded to the concerned Registrar of Firms.

The Register of Firms will verify the application and grant registration certificate. It usually takes around 10-12 days to grant the registration certificate. After the issue of the registration certificate, the Registrar of Firms will enter the firm’s details in the Register maintained at the Registrar’s Office. 

The applicant can track the registration application status by visiting the Registration and Stamps Department website and clicking on the ‘Status of Application’ option. The applicant must enter the ‘Application Reference No’ and click on the ‘Submit’ button on the next page. The status of the registration application will be displayed.

Documents Required for Partnership Firm

The following documents need to be furnished for registering a partnership firm:

• Form-1.
• Partnership deed.
• ID proof of partners.
• Address proof of partners.
• PAN card of the partners.
• Photographs of all partners.
• Self-signed declaration.
• An affidavit when the firm office is situated on its own land.
• A lease deed when the firm office is situated on rented or leased land.